Correlation Between DAX Index and ArcelorMittal
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By analyzing existing cross correlation between DAX Index and ArcelorMittal SA, you can compare the effects of market volatilities on DAX Index and ArcelorMittal 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 ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and ArcelorMittal.
Diversification Opportunities for DAX Index and ArcelorMittal
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and ArcelorMittal is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA 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 ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of DAX Index i.e., DAX Index and ArcelorMittal go up and down completely randomly.
Pair Corralation between DAX Index and ArcelorMittal
Assuming the 90 days trading horizon DAX Index is expected to under-perform the ArcelorMittal. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 2.5 times less risky than ArcelorMittal. The index trades about -0.03 of its potential returns per unit of risk. The ArcelorMittal SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,155 in ArcelorMittal SA on August 25, 2024 and sell it today you would earn a total of 216.00 from holding ArcelorMittal SA or generate 10.02% 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. ArcelorMittal SA
Performance |
| Timeline |
DAX Index and ArcelorMittal Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
ArcelorMittal SA
Pair trading matchups for ArcelorMittal
Pair Trading with DAX Index and ArcelorMittal
The main advantage of trading using opposite DAX Index and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, ArcelorMittal 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 ArcelorMittal will offset losses from the drop in ArcelorMittal'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 |
| ArcelorMittal vs. JD SPORTS FASH | ArcelorMittal vs. SCOTT TECHNOLOGY | ArcelorMittal vs. Vishay Intertechnology | ArcelorMittal vs. UNIVERSAL MUSIC GROUP |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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