Correlation Between DAX Index and Heidelberg Materials
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By analyzing existing cross correlation between DAX Index and Heidelberg Materials AG, you can compare the effects of market volatilities on DAX Index and Heidelberg Materials 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 Heidelberg Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Heidelberg Materials.
Diversification Opportunities for DAX Index and Heidelberg Materials
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Heidelberg is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Heidelberg Materials AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidelberg Materials 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 Heidelberg Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidelberg Materials has no effect on the direction of DAX Index i.e., DAX Index and Heidelberg Materials go up and down completely randomly.
Pair Corralation between DAX Index and Heidelberg Materials
Assuming the 90 days trading horizon DAX Index is expected to generate 0.42 times more return on investment than Heidelberg Materials. However, DAX Index is 2.39 times less risky than Heidelberg Materials. It trades about 0.48 of its potential returns per unit of risk. Heidelberg Materials AG is currently generating about 0.15 per unit of risk. If you would invest 1,906,031 in DAX Index on September 20, 2024 and sell it today you would earn a total of 118,226 from holding DAX Index or generate 6.2% 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. Heidelberg Materials AG
Performance |
| Timeline |
DAX Index and Heidelberg Materials Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Heidelberg Materials AG
Pair trading matchups for Heidelberg Materials
Pair Trading with DAX Index and Heidelberg Materials
The main advantage of trading using opposite DAX Index and Heidelberg Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Heidelberg Materials 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 Heidelberg Materials will offset losses from the drop in Heidelberg Materials' long position.| DAX Index vs. Warner Music Group | DAX Index vs. Take Two Interactive Software | DAX Index vs. Sixt Leasing SE | DAX Index vs. JAPAN TOBACCO UNSPADR12 |
| Heidelberg Materials vs. Applied Materials | Heidelberg Materials vs. Eidesvik Offshore ASA | Heidelberg Materials vs. THRACE PLASTICS | Heidelberg Materials vs. Haier Smart Home |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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