Correlation Between DAX Index and Equinor ASA
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By analyzing existing cross correlation between DAX Index and Equinor ASA, you can compare the effects of market volatilities on DAX Index and Equinor ASA 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 Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Equinor ASA.
Diversification Opportunities for DAX Index and Equinor ASA
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DAX and Equinor is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA 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 Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of DAX Index i.e., DAX Index and Equinor ASA go up and down completely randomly.
Pair Corralation between DAX Index and Equinor ASA
Assuming the 90 days trading horizon DAX Index is expected to generate 0.32 times more return on investment than Equinor ASA. However, DAX Index is 3.14 times less risky than Equinor ASA. It trades about 0.48 of its potential returns per unit of risk. Equinor ASA is currently generating about -0.06 per unit of risk. If you would invest 1,906,031 in DAX Index on September 20, 2024 and sell it today you would earn a total of 118,226 from holding DAX Index or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Equinor ASA
Performance |
| Timeline |
DAX Index and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Equinor ASA
Pair trading matchups for Equinor ASA
Pair Trading with DAX Index and Equinor ASA
The main advantage of trading using opposite DAX Index and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| DAX Index vs. Warner Music Group | DAX Index vs. Take Two Interactive Software | DAX Index vs. Sixt Leasing SE | DAX Index vs. JAPAN TOBACCO UNSPADR12 |
| Equinor ASA vs. The Boston Beer | Equinor ASA vs. ATOSS SOFTWARE | Equinor ASA vs. UPDATE SOFTWARE | Equinor ASA vs. ScanSource |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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