Correlation Between DAX Index and SIERRA METALS
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By analyzing existing cross correlation between DAX Index and SIERRA METALS, you can compare the effects of market volatilities on DAX Index and SIERRA METALS 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 SIERRA METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and SIERRA METALS.
Diversification Opportunities for DAX Index and SIERRA METALS
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DAX and SIERRA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and SIERRA METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIERRA METALS 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 SIERRA METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIERRA METALS has no effect on the direction of DAX Index i.e., DAX Index and SIERRA METALS go up and down completely randomly.
Pair Corralation between DAX Index and SIERRA METALS
Assuming the 90 days trading horizon DAX Index is expected to generate 2.9 times less return on investment than SIERRA METALS. But when comparing it to its historical volatility, DAX Index is 4.37 times less risky than SIERRA METALS. It trades about 0.08 of its potential returns per unit of risk. SIERRA METALS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 29.00 in SIERRA METALS on October 12, 2024 and sell it today you would earn a total of 25.00 from holding SIERRA METALS or generate 86.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
DAX Index vs. SIERRA METALS
Performance |
| Timeline |
DAX Index and SIERRA METALS Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
SIERRA METALS
Pair trading matchups for SIERRA METALS
Pair Trading with DAX Index and SIERRA METALS
The main advantage of trading using opposite DAX Index and SIERRA METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, SIERRA METALS 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 SIERRA METALS will offset losses from the drop in SIERRA METALS's long position.| DAX Index vs. Eurasia Mining Plc | DAX Index vs. URBAN OUTFITTERS | DAX Index vs. MCEWEN MINING INC | DAX Index vs. ANGLO ASIAN MINING |
| SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc | SIERRA METALS vs. Apple Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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