Correlation Between DAX Index and Nabtesco Corp
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By analyzing existing cross correlation between DAX Index and Nabtesco Corp, you can compare the effects of market volatilities on DAX Index and Nabtesco Corp 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 Nabtesco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Nabtesco Corp.
Diversification Opportunities for DAX Index and Nabtesco Corp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Nabtesco is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Nabtesco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabtesco Corp 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 Nabtesco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabtesco Corp has no effect on the direction of DAX Index i.e., DAX Index and Nabtesco Corp go up and down completely randomly.
Pair Corralation between DAX Index and Nabtesco Corp
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Nabtesco Corp. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 2.67 times less risky than Nabtesco Corp. The index trades about -0.03 of its potential returns per unit of risk. The Nabtesco Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,570 in Nabtesco Corp on October 12, 2024 and sell it today you would earn a total of 130.00 from holding Nabtesco Corp or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
DAX Index vs. Nabtesco Corp
Performance |
| Timeline |
DAX Index and Nabtesco Corp Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Nabtesco Corp
Pair trading matchups for Nabtesco Corp
Pair Trading with DAX Index and Nabtesco Corp
The main advantage of trading using opposite DAX Index and Nabtesco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Nabtesco Corp 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 Nabtesco Corp will offset losses from the drop in Nabtesco Corp's long position.| DAX Index vs. Eurasia Mining Plc | DAX Index vs. URBAN OUTFITTERS | DAX Index vs. MCEWEN MINING INC | DAX Index vs. ANGLO ASIAN MINING |
| Nabtesco Corp vs. Apple Inc | Nabtesco Corp vs. Apple Inc | Nabtesco Corp vs. Apple Inc | Nabtesco Corp vs. Apple Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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