Correlation Between DAX Index and GLOBAL COSMED
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By analyzing existing cross correlation between DAX Index and GLOBAL MED SA, you can compare the effects of market volatilities on DAX Index and GLOBAL COSMED 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 GLOBAL COSMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and GLOBAL COSMED.
Diversification Opportunities for DAX Index and GLOBAL COSMED
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DAX and GLOBAL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and GLOBAL MED SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL MED SA 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 GLOBAL COSMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL MED SA has no effect on the direction of DAX Index i.e., DAX Index and GLOBAL COSMED go up and down completely randomly.
Pair Corralation between DAX Index and GLOBAL COSMED
Assuming the 90 days trading horizon DAX Index is expected to generate 8.75 times less return on investment than GLOBAL COSMED. But when comparing it to its historical volatility, DAX Index is 4.24 times less risky than GLOBAL COSMED. It trades about 0.07 of its potential returns per unit of risk. GLOBAL MED SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 83.00 in GLOBAL MED SA on September 2, 2024 and sell it today you would earn a total of 28.00 from holding GLOBAL MED SA or generate 33.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.48% |
| Values | Daily Returns |
DAX Index vs. GLOBAL MED SA
Performance |
| Timeline |
DAX Index and GLOBAL COSMED Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
GLOBAL MED SA
Pair trading matchups for GLOBAL COSMED
Pair Trading with DAX Index and GLOBAL COSMED
The main advantage of trading using opposite DAX Index and GLOBAL COSMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, GLOBAL COSMED 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 GLOBAL COSMED will offset losses from the drop in GLOBAL COSMED's long position.| DAX Index vs. FEMALE HEALTH | DAX Index vs. CDN IMPERIAL BANK | DAX Index vs. Webster Financial | DAX Index vs. Cardinal Health |
| GLOBAL COSMED vs. Entravision Communications | GLOBAL COSMED vs. Consolidated Communications Holdings | GLOBAL COSMED vs. Hanison Construction Holdings | GLOBAL COSMED vs. Cogent Communications Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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