Correlation Between DAX Index and BASF SE
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By analyzing existing cross correlation between DAX Index and BASF SE, you can compare the effects of market volatilities on DAX Index and BASF SE 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 BASF SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and BASF SE.
Diversification Opportunities for DAX Index and BASF SE
Modest diversification
The 3 months correlation between DAX and BASF is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and BASF SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BASF SE 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 BASF SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BASF SE has no effect on the direction of DAX Index i.e., DAX Index and BASF SE go up and down completely randomly.
Pair Corralation between DAX Index and BASF SE
Assuming the 90 days trading horizon DAX Index is expected to generate 0.3 times more return on investment than BASF SE. However, DAX Index is 3.3 times less risky than BASF SE. It trades about 0.13 of its potential returns per unit of risk. BASF SE is currently generating about 0.01 per unit of risk. If you would invest 1,513,597 in DAX Index on September 1, 2024 and sell it today you would earn a total of 449,048 from holding DAX Index or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
DAX Index vs. BASF SE
Performance |
| Timeline |
DAX Index and BASF SE Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
BASF SE
Pair trading matchups for BASF SE
Pair Trading with DAX Index and BASF SE
The main advantage of trading using opposite DAX Index and BASF SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, BASF SE 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 BASF SE will offset losses from the drop in BASF SE's long position.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| BASF SE vs. ARISTOCRAT LEISURE | BASF SE vs. PLAY2CHILL SA ZY | BASF SE vs. Consolidated Communications Holdings | BASF SE vs. PLAYSTUDIOS A DL 0001 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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