Correlation Between DAX Index and Canon
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By analyzing existing cross correlation between DAX Index and Canon Inc, you can compare the effects of market volatilities on DAX Index and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Canon.
Diversification Opportunities for DAX Index and Canon
Good diversification
The 3 months correlation between DAX and Canon is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc has no effect on the direction of DAX Index i.e., DAX Index and Canon go up and down completely randomly.
Pair Corralation between DAX Index and Canon
Assuming the 90 days trading horizon DAX Index is expected to generate 2.17 times less return on investment than Canon. But when comparing it to its historical volatility, DAX Index is 2.49 times less risky than Canon. It trades about 0.08 of its potential returns per unit of risk. Canon Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,295 in Canon Inc on August 25, 2024 and sell it today you would earn a total of 748.00 from holding Canon Inc or generate 32.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Canon Inc
Performance |
| Timeline |
DAX Index and Canon Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Canon Inc
Pair trading matchups for Canon
Pair Trading with DAX Index and Canon
The main advantage of trading using opposite DAX Index and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| DAX Index vs. Granite Construction | DAX Index vs. AGRICULTBK HADR25 YC | DAX Index vs. ADRIATIC METALS LS 013355 | DAX Index vs. GREENX METALS LTD |
| Canon vs. Sumitomo Mitsui Construction | Canon vs. Columbia Sportswear | Canon vs. ARISTOCRAT LEISURE | Canon vs. PLAYTIKA HOLDING DL 01 |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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