Correlation Between DAX Index and SOS
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By analyzing existing cross correlation between DAX Index and SOS LTD A, you can compare the effects of market volatilities on DAX Index and SOS 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 SOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and SOS.
Diversification Opportunities for DAX Index and SOS
Average diversification
The 3 months correlation between DAX and SOS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and SOS LTD A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOS LTD A 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 SOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOS LTD A has no effect on the direction of DAX Index i.e., DAX Index and SOS go up and down completely randomly.
Pair Corralation between DAX Index and SOS
Assuming the 90 days trading horizon DAX Index is expected to generate 0.03 times more return on investment than SOS. However, DAX Index is 35.2 times less risky than SOS. It trades about 0.48 of its potential returns per unit of risk. SOS LTD A is currently generating about -0.01 per unit of risk. If you would invest 1,921,081 in DAX Index on September 16, 2024 and sell it today you would earn a total of 119,511 from holding DAX Index or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
DAX Index vs. SOS LTD A
Performance |
| Timeline |
DAX Index and SOS Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
SOS LTD A
Pair trading matchups for SOS
Pair Trading with DAX Index and SOS
The main advantage of trading using opposite DAX Index and SOS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, SOS 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 SOS will offset losses from the drop in SOS's long position.| DAX Index vs. PLAYTIKA HOLDING DL 01 | DAX Index vs. Eagle Materials | DAX Index vs. Materialise NV | DAX Index vs. JD SPORTS FASH |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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