Correlation Between DAX Index and Formycon
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By analyzing existing cross correlation between DAX Index and Formycon AG, you can compare the effects of market volatilities on DAX Index and Formycon 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 Formycon. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Formycon.
Diversification Opportunities for DAX Index and Formycon
Poor diversification
The 3 months correlation between DAX and Formycon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Formycon AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formycon AG 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 Formycon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formycon AG has no effect on the direction of DAX Index i.e., DAX Index and Formycon go up and down completely randomly.
Pair Corralation between DAX Index and Formycon
Assuming the 90 days trading horizon DAX Index is expected to generate 0.21 times more return on investment than Formycon. However, DAX Index is 4.66 times less risky than Formycon. It trades about 0.59 of its potential returns per unit of risk. Formycon AG is currently generating about 0.0 per unit of risk. If you would invest 2,002,466 in DAX Index on November 1, 2024 and sell it today you would earn a total of 161,287 from holding DAX Index or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
DAX Index vs. Formycon AG
Performance |
| Timeline |
DAX Index and Formycon Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Formycon AG
Pair trading matchups for Formycon
Pair Trading with DAX Index and Formycon
The main advantage of trading using opposite DAX Index and Formycon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Formycon 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 Formycon will offset losses from the drop in Formycon's long position.| DAX Index vs. Renesas Electronics | DAX Index vs. AIR PRODCHEMICALS | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. VIVA WINE GROUP |
| Formycon vs. Verizon Communications | Formycon vs. Chiba Bank | Formycon vs. MAVEN WIRELESS SWEDEN | Formycon vs. PNC Financial Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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