Correlation Between DAX Index and Global X
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By analyzing existing cross correlation between DAX Index and Global X China, you can compare the effects of market volatilities on DAX Index and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Global X.
Diversification Opportunities for DAX Index and Global X
Very weak diversification
The 3 months correlation between DAX and Global is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Global X China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X China 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X China has no effect on the direction of DAX Index i.e., DAX Index and Global X go up and down completely randomly.
Pair Corralation between DAX Index and Global X
Assuming the 90 days trading horizon DAX Index is expected to generate 0.2 times more return on investment than Global X. However, DAX Index is 4.9 times less risky than Global X. It trades about 0.53 of its potential returns per unit of risk. Global X China is currently generating about -0.05 per unit of risk. If you would invest 1,900,311 in DAX Index on September 14, 2024 and sell it today you would earn a total of 142,316 from holding DAX Index or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. Global X China
Performance |
| Timeline |
DAX Index and Global X Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Global X China
Pair trading matchups for Global X
Pair Trading with DAX Index and Global X
The main advantage of trading using opposite DAX Index and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| DAX Index vs. CARSALESCOM | DAX Index vs. Sumitomo Mitsui Construction | DAX Index vs. H FARM SPA | DAX Index vs. Nufarm Limited |
| Global X vs. UBS Fund Solutions | Global X vs. Xtrackers II | Global X vs. Xtrackers Nikkei 225 | Global X vs. iShares VII PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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