Correlation Between DAX Index and Fanhua
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By analyzing existing cross correlation between DAX Index and Fanhua Inc, you can compare the effects of market volatilities on DAX Index and Fanhua 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 Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Fanhua.
Diversification Opportunities for DAX Index and Fanhua
Very good diversification
The 3 months correlation between DAX and Fanhua is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc 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 Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of DAX Index i.e., DAX Index and Fanhua go up and down completely randomly.
Pair Corralation between DAX Index and Fanhua
Assuming the 90 days trading horizon DAX Index is expected to generate 0.17 times more return on investment than Fanhua. However, DAX Index is 5.96 times less risky than Fanhua. It trades about 0.08 of its potential returns per unit of risk. Fanhua Inc is currently generating about -0.15 per unit of risk. If you would invest 1,802,658 in DAX Index on October 12, 2024 and sell it today you would earn a total of 229,052 from holding DAX Index or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Fanhua Inc
Performance |
| Timeline |
DAX Index and Fanhua Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Fanhua Inc
Pair trading matchups for Fanhua
Pair Trading with DAX Index and Fanhua
The main advantage of trading using opposite DAX Index and Fanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Fanhua 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 Fanhua will offset losses from the drop in Fanhua's long position.| DAX Index vs. Scottish Mortgage Investment | DAX Index vs. Keck Seng Investments | DAX Index vs. Lendlease Group | DAX Index vs. FIRST SAVINGS FINL |
| Fanhua vs. Q2M Managementberatung AG | Fanhua vs. CeoTronics AG | Fanhua vs. Ares Management Corp | Fanhua vs. VITEC SOFTWARE GROUP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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