Correlation Between DAX Index and EAST AFRICAN
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By analyzing existing cross correlation between DAX Index and EAST AFRICAN BREWERIES, you can compare the effects of market volatilities on DAX Index and EAST AFRICAN 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 EAST AFRICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and EAST AFRICAN.
Diversification Opportunities for DAX Index and EAST AFRICAN
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and EAST is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and EAST AFRICAN BREWERIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST AFRICAN BREWERIES 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 EAST AFRICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST AFRICAN BREWERIES has no effect on the direction of DAX Index i.e., DAX Index and EAST AFRICAN go up and down completely randomly.
Pair Corralation between DAX Index and EAST AFRICAN
Assuming the 90 days trading horizon DAX Index is expected to generate 4.34 times less return on investment than EAST AFRICAN. But when comparing it to its historical volatility, DAX Index is 3.53 times less risky than EAST AFRICAN. It trades about 0.09 of its potential returns per unit of risk. EAST AFRICAN BREWERIES is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,600 in EAST AFRICAN BREWERIES on August 28, 2024 and sell it today you would earn a total of 7,400 from holding EAST AFRICAN BREWERIES or generate 69.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.7% |
| Values | Daily Returns |
DAX Index vs. EAST AFRICAN BREWERIES
Performance |
| Timeline |
DAX Index and EAST AFRICAN Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
EAST AFRICAN BREWERIES
Pair trading matchups for EAST AFRICAN
Pair Trading with DAX Index and EAST AFRICAN
The main advantage of trading using opposite DAX Index and EAST AFRICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, EAST AFRICAN 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 EAST AFRICAN will offset losses from the drop in EAST AFRICAN's long position.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
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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