Correlation Between DAX Index and EOG Resources
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By analyzing existing cross correlation between DAX Index and EOG Resources, you can compare the effects of market volatilities on DAX Index and EOG Resources 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 EOG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and EOG Resources.
Diversification Opportunities for DAX Index and EOG Resources
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and EOG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and EOG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOG Resources 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 EOG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOG Resources has no effect on the direction of DAX Index i.e., DAX Index and EOG Resources go up and down completely randomly.
Pair Corralation between DAX Index and EOG Resources
Assuming the 90 days trading horizon DAX Index is expected to under-perform the EOG Resources. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 2.11 times less risky than EOG Resources. The index trades about -0.01 of its potential returns per unit of risk. The EOG Resources is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 11,120 in EOG Resources on August 30, 2024 and sell it today you would earn a total of 1,460 from holding EOG Resources or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. EOG Resources
Performance |
| Timeline |
DAX Index and EOG Resources Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
EOG Resources
Pair trading matchups for EOG Resources
Pair Trading with DAX Index and EOG Resources
The main advantage of trading using opposite DAX Index and EOG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, EOG Resources 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 EOG Resources will offset losses from the drop in EOG Resources' long position.| DAX Index vs. NEWELL RUBBERMAID | DAX Index vs. APPLIED MATERIALS | DAX Index vs. Compagnie Plastic Omnium | DAX Index vs. Vulcan Materials |
| EOG Resources vs. Alibaba Group Holding | EOG Resources vs. WOODSIDE ENE SPADR | EOG Resources vs. Woodside Energy Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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