Correlation Between DAX Index and East Japan
Specify exactly 2 symbols:
By analyzing existing cross correlation between DAX Index and East Japan Railway, you can compare the effects of market volatilities on DAX Index and East Japan 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 Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and East Japan.
Diversification Opportunities for DAX Index and East Japan
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and East is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and East Japan Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Japan Railway 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 Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Japan Railway has no effect on the direction of DAX Index i.e., DAX Index and East Japan go up and down completely randomly.
Pair Corralation between DAX Index and East Japan
Assuming the 90 days trading horizon DAX Index is expected to generate 0.45 times more return on investment than East Japan. However, DAX Index is 2.21 times less risky than East Japan. It trades about 0.07 of its potential returns per unit of risk. East Japan Railway is currently generating about 0.01 per unit of risk. If you would invest 1,534,591 in DAX Index on September 28, 2024 and sell it today you would earn a total of 450,286 from holding DAX Index or generate 29.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. East Japan Railway
Performance |
| Timeline |
DAX Index and East Japan Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
East Japan Railway
Pair trading matchups for East Japan
Pair Trading with DAX Index and East Japan
The main advantage of trading using opposite DAX Index and East Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, East Japan 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 Japan will offset losses from the drop in East Japan's long position.| DAX Index vs. Ultra Clean Holdings | DAX Index vs. Consolidated Communications Holdings | DAX Index vs. VITEC SOFTWARE GROUP | DAX Index vs. Check Point Software |
| East Japan vs. Canadian National Railway | East Japan vs. MTR Limited | East Japan vs. CRRC Limited | East Japan vs. Westinghouse Air Brake |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |