Correlation Between DAX Index and Cabot
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By analyzing existing cross correlation between DAX Index and Cabot, you can compare the effects of market volatilities on DAX Index and Cabot 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 Cabot. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Cabot.
Diversification Opportunities for DAX Index and Cabot
Excellent diversification
The 3 months correlation between DAX and Cabot is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Cabot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabot 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 Cabot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabot has no effect on the direction of DAX Index i.e., DAX Index and Cabot go up and down completely randomly.
Pair Corralation between DAX Index and Cabot
Assuming the 90 days trading horizon DAX Index is expected to generate 0.61 times more return on investment than Cabot. However, DAX Index is 1.64 times less risky than Cabot. It trades about 0.54 of its potential returns per unit of risk. Cabot is currently generating about 0.06 per unit of risk. If you would invest 1,998,432 in DAX Index on October 25, 2024 and sell it today you would earn a total of 126,995 from holding DAX Index or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
DAX Index vs. Cabot
Performance |
| Timeline |
DAX Index and Cabot Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Cabot
Pair trading matchups for Cabot
Pair Trading with DAX Index and Cabot
The main advantage of trading using opposite DAX Index and Cabot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Cabot 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 Cabot will offset losses from the drop in Cabot's long position.| DAX Index vs. Retail Estates NV | DAX Index vs. AEON STORES | DAX Index vs. BJs Wholesale Club | DAX Index vs. Nanjing Panda Electronics |
| Cabot vs. JAPAN AIRLINES | Cabot vs. AEGEAN AIRLINES | Cabot vs. PennantPark Investment | Cabot vs. New Residential Investment |
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 CEOs Directory module to screen CEOs from public companies around the world.
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