Correlation Between DAX Index and LEGACY IRON
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By analyzing existing cross correlation between DAX Index and LEGACY IRON ORE, you can compare the effects of market volatilities on DAX Index and LEGACY IRON 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 LEGACY IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and LEGACY IRON.
Diversification Opportunities for DAX Index and LEGACY IRON
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and LEGACY is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and LEGACY IRON ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEGACY IRON ORE 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 LEGACY IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEGACY IRON ORE has no effect on the direction of DAX Index i.e., DAX Index and LEGACY IRON go up and down completely randomly.
Pair Corralation between DAX Index and LEGACY IRON
Assuming the 90 days trading horizon DAX Index is expected to generate 0.46 times more return on investment than LEGACY IRON. However, DAX Index is 2.15 times less risky than LEGACY IRON. It trades about -0.03 of its potential returns per unit of risk. LEGACY IRON ORE is currently generating about -0.21 per unit of risk. If you would invest 1,944,300 in DAX Index on August 25, 2024 and sell it today you would lose (12,041) from holding DAX Index or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. LEGACY IRON ORE
Performance |
| Timeline |
DAX Index and LEGACY IRON Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
LEGACY IRON ORE
Pair trading matchups for LEGACY IRON
Pair Trading with DAX Index and LEGACY IRON
The main advantage of trading using opposite DAX Index and LEGACY IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, LEGACY IRON 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 LEGACY IRON will offset losses from the drop in LEGACY IRON's long position.| DAX Index vs. Salesforce | DAX Index vs. YATRA ONLINE DL 0001 | DAX Index vs. Ameriprise Financial | DAX Index vs. Mizuho Financial Group |
| LEGACY IRON vs. Apple Inc | LEGACY IRON vs. Apple Inc | LEGACY IRON vs. Apple Inc | LEGACY IRON 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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