Correlation Between DAX Index and WW Grainger
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By analyzing existing cross correlation between DAX Index and WW Grainger, you can compare the effects of market volatilities on DAX Index and WW Grainger 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 WW Grainger. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and WW Grainger.
Diversification Opportunities for DAX Index and WW Grainger
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and GWW is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of DAX Index i.e., DAX Index and WW Grainger go up and down completely randomly.
Pair Corralation between DAX Index and WW Grainger
Assuming the 90 days trading horizon DAX Index is expected to generate 4.56 times less return on investment than WW Grainger. But when comparing it to its historical volatility, DAX Index is 2.03 times less risky than WW Grainger. It trades about 0.14 of its potential returns per unit of risk. WW Grainger is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 99,773 in WW Grainger on September 1, 2024 and sell it today you would earn a total of 14,477 from holding WW Grainger or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. WW Grainger
Performance |
| Timeline |
DAX Index and WW Grainger Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
WW Grainger
Pair trading matchups for WW Grainger
Pair Trading with DAX Index and WW Grainger
The main advantage of trading using opposite DAX Index and WW Grainger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, WW Grainger 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 WW Grainger will offset losses from the drop in WW Grainger's long position.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| WW Grainger vs. Uber Technologies | WW Grainger vs. ASURE SOFTWARE | WW Grainger vs. UPDATE SOFTWARE | WW Grainger vs. NetSol Technologies |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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