Correlation Between DAX Index and EuropaCorp
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By analyzing existing cross correlation between DAX Index and EuropaCorp, you can compare the effects of market volatilities on DAX Index and EuropaCorp 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 EuropaCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and EuropaCorp.
Diversification Opportunities for DAX Index and EuropaCorp
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DAX and EuropaCorp is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and EuropaCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EuropaCorp 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 EuropaCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EuropaCorp has no effect on the direction of DAX Index i.e., DAX Index and EuropaCorp go up and down completely randomly.
Pair Corralation between DAX Index and EuropaCorp
Assuming the 90 days trading horizon DAX Index is expected to generate 0.2 times more return on investment than EuropaCorp. However, DAX Index is 5.07 times less risky than EuropaCorp. It trades about 0.08 of its potential returns per unit of risk. EuropaCorp is currently generating about 0.0 per unit of risk. If you would invest 1,449,789 in DAX Index on September 3, 2024 and sell it today you would earn a total of 512,856 from holding DAX Index or generate 35.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. EuropaCorp
Performance |
| Timeline |
DAX Index and EuropaCorp Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
EuropaCorp
Pair trading matchups for EuropaCorp
Pair Trading with DAX Index and EuropaCorp
The main advantage of trading using opposite DAX Index and EuropaCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, EuropaCorp 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 EuropaCorp will offset losses from the drop in EuropaCorp's long position.| DAX Index vs. SPORT LISBOA E | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. Live Nation Entertainment | DAX Index vs. Transport International Holdings |
| EuropaCorp vs. STMicroelectronics NV | EuropaCorp vs. AOI Electronics Co | EuropaCorp vs. Methode Electronics | EuropaCorp vs. UET United Electronic |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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