Correlation Between DAX Index and Equity Residential
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By analyzing existing cross correlation between DAX Index and Equity Residential, you can compare the effects of market volatilities on DAX Index and Equity Residential 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 Equity Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Equity Residential.
Diversification Opportunities for DAX Index and Equity Residential
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAX and Equity is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Equity Residential in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Residential 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 Equity Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Residential has no effect on the direction of DAX Index i.e., DAX Index and Equity Residential go up and down completely randomly.
Pair Corralation between DAX Index and Equity Residential
Assuming the 90 days trading horizon DAX Index is expected to generate 1.13 times less return on investment than Equity Residential. But when comparing it to its historical volatility, DAX Index is 1.53 times less risky than Equity Residential. It trades about 0.09 of its potential returns per unit of risk. Equity Residential is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,222 in Equity Residential on September 23, 2024 and sell it today you would earn a total of 628.00 from holding Equity Residential or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Equity Residential
Performance |
| Timeline |
DAX Index and Equity Residential Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Equity Residential
Pair trading matchups for Equity Residential
Pair Trading with DAX Index and Equity Residential
The main advantage of trading using opposite DAX Index and Equity Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Equity Residential 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 Equity Residential will offset losses from the drop in Equity Residential's long position.| DAX Index vs. alstria office REIT AG | DAX Index vs. OFFICE DEPOT | DAX Index vs. CHINA EDUCATION GROUP | DAX Index vs. MAVEN WIRELESS SWEDEN |
| Equity Residential vs. AvalonBay Communities | Equity Residential vs. UDR Inc | Equity Residential vs. INVITATION HOMES DL | Equity Residential vs. Mid America Apartment Communities |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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