Correlation Between DAX Index and Alumex PLC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DAX Index and Alumex PLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DAX Index and Alumex PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAX Index and Alumex PLC, you can compare the effects of market volatilities on DAX Index and Alumex PLC 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 Alumex PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Alumex PLC.

Diversification Opportunities for DAX Index and Alumex PLC

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between DAX and Alumex is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Alumex PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumex PLC 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 Alumex PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumex PLC has no effect on the direction of DAX Index i.e., DAX Index and Alumex PLC go up and down completely randomly.
    Optimize

Pair Corralation between DAX Index and Alumex PLC

Assuming the 90 days trading horizon DAX Index is expected to generate 0.42 times more return on investment than Alumex PLC. However, DAX Index is 2.37 times less risky than Alumex PLC. It trades about 0.33 of its potential returns per unit of risk. Alumex PLC is currently generating about -0.05 per unit of risk. If you would invest  2,128,218  in DAX Index on November 28, 2024 and sell it today you would earn a total of  151,193  from holding DAX Index or generate 7.1% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy86.96%
ValuesDaily Returns

DAX Index  vs.  Alumex PLC

 Performance 
       Timeline  

DAX Index and Alumex PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DAX Index and Alumex PLC

The main advantage of trading using opposite DAX Index and Alumex PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Alumex PLC 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 Alumex PLC will offset losses from the drop in Alumex PLC's long position.
DAX Index vs. TRAVEL LEISURE DL 01
DAX Index vs. COLUMBIA SPORTSWEAR
DAX Index vs. InPlay Oil Corp
DAX Index vs. MAVEN WIRELESS SWEDEN
The idea behind DAX Index and Alumex PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Alumex PLC vs. Union Bank
Alumex PLC vs. National Development Bank
Alumex PLC vs. Hatton National Bank
Alumex PLC vs. COMMERCIAL BANK OF
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
FinTech Suite
Use AI to screen and filter profitable investment opportunities
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories


 
Macroaxis helps investors of all levels and skills to maximize the upside of all their holdings and minimize the risk associated with market volatility, economic swings, and company-specific events. View terms and conditions
 
Feedback Blog
Made with optimal in San Francisco
2024 Macroaxis LLC
COMMON DESTINATIONS
MAIN CATEGORIES
COMPANY