Correlation Between DAX Index and ASSA ABLOY
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By analyzing existing cross correlation between DAX Index and ASSA ABLOY AB, you can compare the effects of market volatilities on DAX Index and ASSA ABLOY 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 ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and ASSA ABLOY.
Diversification Opportunities for DAX Index and ASSA ABLOY
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and ASSA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB 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 ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of DAX Index i.e., DAX Index and ASSA ABLOY go up and down completely randomly.
Pair Corralation between DAX Index and ASSA ABLOY
Assuming the 90 days trading horizon DAX Index is expected to generate 0.51 times more return on investment than ASSA ABLOY. However, DAX Index is 1.96 times less risky than ASSA ABLOY. It trades about 0.1 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about -0.27 per unit of risk. If you would invest 2,031,381 in DAX Index on October 17, 2024 and sell it today you would earn a total of 26,087 from holding DAX Index or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. ASSA ABLOY AB
Performance |
| Timeline |
DAX Index and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
ASSA ABLOY AB
Pair trading matchups for ASSA ABLOY
Pair Trading with DAX Index and ASSA ABLOY
The main advantage of trading using opposite DAX Index and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| DAX Index vs. CyberArk Software | DAX Index vs. Lendlease Group | DAX Index vs. PSI Software AG | DAX Index vs. Take Two Interactive Software |
| ASSA ABLOY vs. INSURANCE AUST GRP | ASSA ABLOY vs. SINGAPORE AIRLINES | ASSA ABLOY vs. Universal Insurance Holdings | ASSA ABLOY vs. Japan Post Insurance |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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