Correlation Between DAX Index and Power Assets
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By analyzing existing cross correlation between DAX Index and Power Assets Holdings, you can compare the effects of market volatilities on DAX Index and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Power Assets.
Diversification Opportunities for DAX Index and Power Assets
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Power is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of DAX Index i.e., DAX Index and Power Assets go up and down completely randomly.
Pair Corralation between DAX Index and Power Assets
Assuming the 90 days trading horizon DAX Index is expected to generate 0.45 times more return on investment than Power Assets. However, DAX Index is 2.24 times less risky than Power Assets. It trades about 0.19 of its potential returns per unit of risk. Power Assets Holdings is currently generating about 0.08 per unit of risk. If you would invest 1,874,711 in DAX Index on November 2, 2024 and sell it today you would earn a total of 298,009 from holding DAX Index or generate 15.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
DAX Index vs. Power Assets Holdings
Performance |
| Timeline |
DAX Index and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Power Assets Holdings
Pair trading matchups for Power Assets
Pair Trading with DAX Index and Power Assets
The main advantage of trading using opposite DAX Index and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| DAX Index vs. Fuji Media Holdings | DAX Index vs. PENN Entertainment | DAX Index vs. WILLIS LEASE FIN | DAX Index vs. Live Nation Entertainment |
| Power Assets vs. National Retail Properties | Power Assets vs. MHP Hotel AG | Power Assets vs. Caseys General Stores | Power Assets vs. FAST RETAIL ADR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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