Correlation Between DAX Index and BW LPG
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By analyzing existing cross correlation between DAX Index and BW LPG Limited, you can compare the effects of market volatilities on DAX Index and BW LPG 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 BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and BW LPG.
Diversification Opportunities for DAX Index and BW LPG
Good diversification
The 3 months correlation between DAX and BW9 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and BW LPG Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG Limited 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 BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG Limited has no effect on the direction of DAX Index i.e., DAX Index and BW LPG go up and down completely randomly.
Pair Corralation between DAX Index and BW LPG
Assuming the 90 days trading horizon DAX Index is expected to under-perform the BW LPG. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 3.45 times less risky than BW LPG. The index trades about -0.05 of its potential returns per unit of risk. The BW LPG Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,205 in BW LPG Limited on August 29, 2024 and sell it today you would earn a total of 31.00 from holding BW LPG Limited or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. BW LPG Limited
Performance |
| Timeline |
DAX Index and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
BW LPG Limited
Pair trading matchups for BW LPG
Pair Trading with DAX Index and BW LPG
The main advantage of trading using opposite DAX Index and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| DAX Index vs. Gladstone Investment | DAX Index vs. REINET INVESTMENTS SCA | DAX Index vs. CarsalesCom | DAX Index vs. MARKET VECTR RETAIL |
| BW LPG vs. ZANAGA IRON ORE | BW LPG vs. NIPPON STEEL SPADR | BW LPG vs. ZURICH INSURANCE GROUP | BW LPG vs. Safety Insurance 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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