Correlation Between DAX Index and Coffee Holding
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By analyzing existing cross correlation between DAX Index and Coffee Holding Co, you can compare the effects of market volatilities on DAX Index and Coffee Holding 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 Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Coffee Holding.
Diversification Opportunities for DAX Index and Coffee Holding
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DAX and Coffee is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding 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 Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of DAX Index i.e., DAX Index and Coffee Holding go up and down completely randomly.
Pair Corralation between DAX Index and Coffee Holding
Assuming the 90 days trading horizon DAX Index is expected to generate 0.13 times more return on investment than Coffee Holding. However, DAX Index is 7.48 times less risky than Coffee Holding. It trades about -0.08 of its potential returns per unit of risk. Coffee Holding Co is currently generating about -0.16 per unit of risk. If you would invest 2,040,592 in DAX Index on October 14, 2024 and sell it today you would lose (19,113) from holding DAX Index or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Coffee Holding Co
Performance |
| Timeline |
DAX Index and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Coffee Holding Co
Pair trading matchups for Coffee Holding
Pair Trading with DAX Index and Coffee Holding
The main advantage of trading using opposite DAX Index and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| DAX Index vs. The Japan Steel | DAX Index vs. Khiron Life Sciences | DAX Index vs. TRADELINK ELECTRON | DAX Index vs. Tradegate AG Wertpapierhandelsbank |
| Coffee Holding vs. GWILLI FOOD | Coffee Holding vs. Richardson Electronics | Coffee Holding vs. Nomad Foods | Coffee Holding vs. Tyson Foods |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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