Correlation Between DAX Index and Deutsche Börse
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By analyzing existing cross correlation between DAX Index and Deutsche Brse AG, you can compare the effects of market volatilities on DAX Index and Deutsche Börse 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 Deutsche Börse. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Deutsche Börse.
Diversification Opportunities for DAX Index and Deutsche Börse
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Deutsche is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Deutsche Brse AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Brse AG 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 Deutsche Börse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Brse AG has no effect on the direction of DAX Index i.e., DAX Index and Deutsche Börse go up and down completely randomly.
Pair Corralation between DAX Index and Deutsche Börse
Assuming the 90 days trading horizon DAX Index is expected to generate 0.7 times more return on investment than Deutsche Börse. However, DAX Index is 1.44 times less risky than Deutsche Börse. It trades about 0.12 of its potential returns per unit of risk. Deutsche Brse AG is currently generating about 0.08 per unit of risk. If you would invest 1,473,526 in DAX Index on December 4, 2024 and sell it today you would earn a total of 841,176 from holding DAX Index or generate 57.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Deutsche Brse AG
Performance |
| Timeline |
DAX Index and Deutsche Börse Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Deutsche Brse AG
Pair trading matchups for Deutsche Börse
Pair Trading with DAX Index and Deutsche Börse
The main advantage of trading using opposite DAX Index and Deutsche Börse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Deutsche Börse 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 Deutsche Börse will offset losses from the drop in Deutsche Börse's long position.| DAX Index vs. Boston Beer Co | DAX Index vs. THAI BEVERAGE | DAX Index vs. SCANSOURCE | DAX Index vs. Strategic Education |
| Deutsche Börse vs. East Africa Metals | Deutsche Börse vs. MARKET VECTR RETAIL | Deutsche Börse vs. Harmony Gold Mining | Deutsche Börse vs. Retail Estates NV |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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