Correlation Between DAX Index and Far East
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By analyzing existing cross correlation between DAX Index and Far East Horizon, you can compare the effects of market volatilities on DAX Index and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Far East.
Diversification Opportunities for DAX Index and Far East
Very weak diversification
The 3 months correlation between DAX and Far is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of DAX Index i.e., DAX Index and Far East go up and down completely randomly.
Pair Corralation between DAX Index and Far East
Assuming the 90 days trading horizon DAX Index is expected to generate 3.33 times less return on investment than Far East. But when comparing it to its historical volatility, DAX Index is 6.89 times less risky than Far East. It trades about 0.08 of its potential returns per unit of risk. Far East Horizon is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Far East Horizon on September 26, 2024 and sell it today you would earn a total of 25.00 from holding Far East Horizon or generate 65.79% 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. Far East Horizon
Performance |
| Timeline |
DAX Index and Far East Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Far East Horizon
Pair trading matchups for Far East
Pair Trading with DAX Index and Far East
The main advantage of trading using opposite DAX Index and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East's long position.| DAX Index vs. CODERE ONLINE LUX | DAX Index vs. CARSALESCOM | DAX Index vs. PACIFIC ONLINE | DAX Index vs. Focus Home Interactive |
| Far East vs. Walker Dunlop | Far East vs. Paragon Banking Group | Far East vs. Hercules Capital | Far East vs. DIVERSIFIED ROYALTY |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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