Correlation Between DAX Index and Advanced Micro
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By analyzing existing cross correlation between DAX Index and Advanced Micro Devices, you can compare the effects of market volatilities on DAX Index and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Advanced Micro.
Diversification Opportunities for DAX Index and Advanced Micro
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Advanced is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of DAX Index i.e., DAX Index and Advanced Micro go up and down completely randomly.
Pair Corralation between DAX Index and Advanced Micro
Assuming the 90 days trading horizon DAX Index is expected to generate 0.36 times more return on investment than Advanced Micro. However, DAX Index is 2.78 times less risky than Advanced Micro. It trades about -0.05 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.19 per unit of risk. If you would invest 1,953,162 in DAX Index on August 29, 2024 and sell it today you would lose (23,564) from holding DAX Index or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Advanced Micro Devices
Performance |
| Timeline |
DAX Index and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Advanced Micro Devices
Pair trading matchups for Advanced Micro
Pair Trading with DAX Index and Advanced Micro
The main advantage of trading using opposite DAX Index and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Advanced Micro vs. NVIDIA | Advanced Micro vs. NVIDIA | Advanced Micro vs. QUALCOMM Incorporated | Advanced Micro vs. Intel |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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