Correlation Between DAX Index and DiamondRock Hospitality
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By analyzing existing cross correlation between DAX Index and DiamondRock Hospitality, you can compare the effects of market volatilities on DAX Index and DiamondRock Hospitality 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 DiamondRock Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and DiamondRock Hospitality.
Diversification Opportunities for DAX Index and DiamondRock Hospitality
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and DiamondRock is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and DiamondRock Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DiamondRock Hospitality 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 DiamondRock Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DiamondRock Hospitality has no effect on the direction of DAX Index i.e., DAX Index and DiamondRock Hospitality go up and down completely randomly.
Pair Corralation between DAX Index and DiamondRock Hospitality
Assuming the 90 days trading horizon DAX Index is expected to generate 5.91 times less return on investment than DiamondRock Hospitality. But when comparing it to its historical volatility, DAX Index is 2.98 times less risky than DiamondRock Hospitality. It trades about 0.09 of its potential returns per unit of risk. DiamondRock Hospitality is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 770.00 in DiamondRock Hospitality on August 31, 2024 and sell it today you would earn a total of 85.00 from holding DiamondRock Hospitality or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. DiamondRock Hospitality
Performance |
| Timeline |
DAX Index and DiamondRock Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
DiamondRock Hospitality
Pair trading matchups for DiamondRock Hospitality
Pair Trading with DAX Index and DiamondRock Hospitality
The main advantage of trading using opposite DAX Index and DiamondRock Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, DiamondRock Hospitality 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 DiamondRock Hospitality will offset losses from the drop in DiamondRock Hospitality's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| DiamondRock Hospitality vs. Sotherly Hotels | DiamondRock Hospitality vs. Superior Plus Corp | DiamondRock Hospitality vs. NMI Holdings | DiamondRock Hospitality vs. Origin Agritech |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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