Correlation Between DAX Index and CITIC
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By analyzing existing cross correlation between DAX Index and CITIC Limited, you can compare the effects of market volatilities on DAX Index and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and CITIC.
Diversification Opportunities for DAX Index and CITIC
Very poor diversification
The 3 months correlation between DAX and CITIC is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of DAX Index i.e., DAX Index and CITIC go up and down completely randomly.
Pair Corralation between DAX Index and CITIC
Assuming the 90 days trading horizon DAX Index is expected to generate 22.89 times less return on investment than CITIC. But when comparing it to its historical volatility, DAX Index is 5.89 times less risky than CITIC. It trades about 0.04 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 67.00 in CITIC Limited on August 29, 2024 and sell it today you would earn a total of 37.00 from holding CITIC Limited or generate 55.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. CITIC Limited
Performance |
| Timeline |
DAX Index and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
CITIC Limited
Pair trading matchups for CITIC
Pair Trading with DAX Index and CITIC
The main advantage of trading using opposite DAX Index and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| DAX Index vs. Gladstone Investment | DAX Index vs. REINET INVESTMENTS SCA | DAX Index vs. CarsalesCom | DAX Index vs. MARKET VECTR RETAIL |
| CITIC vs. SBA Communications Corp | CITIC vs. The Boston Beer | CITIC vs. Singapore Telecommunications Limited | CITIC vs. Verizon Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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