Correlation Between DAX Index and Bodycote PLC
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By analyzing existing cross correlation between DAX Index and Bodycote PLC, you can compare the effects of market volatilities on DAX Index and Bodycote PLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in DAX Index with a short position of Bodycote PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Bodycote PLC.
Diversification Opportunities for DAX Index and Bodycote PLC
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Bodycote is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Bodycote PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bodycote PLC and DAX Index is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on DAX Index are associated (or correlated) with Bodycote PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bodycote PLC has no effect on the direction of DAX Index i.e., DAX Index and Bodycote PLC go up and down completely randomly.
Pair Corralation between DAX Index and Bodycote PLC
Assuming the 90 days trading horizon DAX Index is expected to generate 3.72 times less return on investment than Bodycote PLC. But when comparing it to its historical volatility, DAX Index is 3.53 times less risky than Bodycote PLC. It trades about 0.26 of its potential returns per unit of risk. Bodycote PLC is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 670.00 in Bodycote PLC on September 12, 2024 and sell it today you would earn a total of 125.00 from holding Bodycote PLC or generate 18.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Bodycote PLC
Performance |
| Timeline |
DAX Index and Bodycote PLC Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Bodycote PLC
Pair trading matchups for Bodycote PLC
Pair Trading with DAX Index and Bodycote PLC
The main advantage of trading using opposite DAX Index and Bodycote PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Bodycote PLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bodycote PLC will offset losses from the drop in Bodycote PLC's long position.| DAX Index vs. Arrow Electronics | DAX Index vs. CANON MARKETING JP | DAX Index vs. The Trade Desk | DAX Index vs. METHODE ELECTRONICS |
| Bodycote PLC vs. Spirent Communications plc | Bodycote PLC vs. Verizon Communications | Bodycote PLC vs. Computer And Technologies | Bodycote PLC vs. United Internet AG |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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