Correlation Between DAX Index and Deutsche Wohnen
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By analyzing existing cross correlation between DAX Index and Deutsche Wohnen SE, you can compare the effects of market volatilities on DAX Index and Deutsche Wohnen 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 Wohnen. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Deutsche Wohnen.
Diversification Opportunities for DAX Index and Deutsche Wohnen
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Deutsche is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Deutsche Wohnen SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Wohnen SE 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 Wohnen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Wohnen SE has no effect on the direction of DAX Index i.e., DAX Index and Deutsche Wohnen go up and down completely randomly.
Pair Corralation between DAX Index and Deutsche Wohnen
Assuming the 90 days trading horizon DAX Index is expected to generate 1.87 times less return on investment than Deutsche Wohnen. But when comparing it to its historical volatility, DAX Index is 1.82 times less risky than Deutsche Wohnen. It trades about 0.14 of its potential returns per unit of risk. Deutsche Wohnen SE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,335 in Deutsche Wohnen SE on September 1, 2024 and sell it today you would earn a total of 130.00 from holding Deutsche Wohnen SE or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. Deutsche Wohnen SE
Performance |
| Timeline |
DAX Index and Deutsche Wohnen Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Deutsche Wohnen SE
Pair trading matchups for Deutsche Wohnen
Pair Trading with DAX Index and Deutsche Wohnen
The main advantage of trading using opposite DAX Index and Deutsche Wohnen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Deutsche Wohnen 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 Wohnen will offset losses from the drop in Deutsche Wohnen's long position.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| Deutsche Wohnen vs. Sun Hung Kai | Deutsche Wohnen vs. China Overseas Land | Deutsche Wohnen vs. Longfor Group Holdings | Deutsche Wohnen vs. Mitsui Fudosan Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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