Correlation Between DAX Index and FBC HOLDINGS
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By analyzing existing cross correlation between DAX Index and FBC HOLDINGS LIMITED, you can compare the effects of market volatilities on DAX Index and FBC HOLDINGS 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 FBC HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and FBC HOLDINGS.
Diversification Opportunities for DAX Index and FBC HOLDINGS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and FBC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and FBC HOLDINGS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FBC HOLDINGS LIMITED 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 FBC HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FBC HOLDINGS LIMITED has no effect on the direction of DAX Index i.e., DAX Index and FBC HOLDINGS go up and down completely randomly.
Pair Corralation between DAX Index and FBC HOLDINGS
Assuming the 90 days trading horizon DAX Index is expected to generate 29.59 times less return on investment than FBC HOLDINGS. But when comparing it to its historical volatility, DAX Index is 6.22 times less risky than FBC HOLDINGS. It trades about 0.05 of its potential returns per unit of risk. FBC HOLDINGS LIMITED is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 55,000 in FBC HOLDINGS LIMITED on August 30, 2024 and sell it today you would earn a total of 65,000 from holding FBC HOLDINGS LIMITED or generate 118.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. FBC HOLDINGS LIMITED
Performance |
| Timeline |
DAX Index and FBC HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
FBC HOLDINGS LIMITED
Pair trading matchups for FBC HOLDINGS
Pair Trading with DAX Index and FBC HOLDINGS
The main advantage of trading using opposite DAX Index and FBC HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, FBC HOLDINGS 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 FBC HOLDINGS will offset losses from the drop in FBC HOLDINGS's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| FBC HOLDINGS vs. STAR AFRICA PORATION | FBC HOLDINGS vs. CAFCA LIMITED | FBC HOLDINGS vs. FIRST MUTUAL PROPERTIES | FBC HOLDINGS vs. AFRICAN DISTILLERS LIMITED |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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