Correlation Between DAX Index and Aqua America
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By analyzing existing cross correlation between DAX Index and Aqua America, you can compare the effects of market volatilities on DAX Index and Aqua America 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 Aqua America. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Aqua America.
Diversification Opportunities for DAX Index and Aqua America
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Aqua is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Aqua America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqua America 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 Aqua America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqua America has no effect on the direction of DAX Index i.e., DAX Index and Aqua America go up and down completely randomly.
Pair Corralation between DAX Index and Aqua America
Assuming the 90 days trading horizon DAX Index is expected to generate 0.57 times more return on investment than Aqua America. However, DAX Index is 1.75 times less risky than Aqua America. It trades about 0.11 of its potential returns per unit of risk. Aqua America is currently generating about 0.05 per unit of risk. If you would invest 1,674,441 in DAX Index on September 14, 2024 and sell it today you would earn a total of 368,186 from holding DAX Index or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
DAX Index vs. Aqua America
Performance |
| Timeline |
DAX Index and Aqua America Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Aqua America
Pair trading matchups for Aqua America
Pair Trading with DAX Index and Aqua America
The main advantage of trading using opposite DAX Index and Aqua America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Aqua America 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 Aqua America will offset losses from the drop in Aqua America's long position.| DAX Index vs. CARSALESCOM | DAX Index vs. Sumitomo Mitsui Construction | DAX Index vs. H FARM SPA | DAX Index vs. Nufarm Limited |
| Aqua America vs. bet at home AG | Aqua America vs. PLAYMATES TOYS | Aqua America vs. CHINA TONTINE WINES | Aqua America vs. KB HOME |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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