Correlation Between DAX Index and Hon Hai
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By analyzing existing cross correlation between DAX Index and Hon Hai Precision, you can compare the effects of market volatilities on DAX Index and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Hon Hai.
Diversification Opportunities for DAX Index and Hon Hai
Poor diversification
The 3 months correlation between DAX and Hon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of DAX Index i.e., DAX Index and Hon Hai go up and down completely randomly.
Pair Corralation between DAX Index and Hon Hai
Assuming the 90 days trading horizon DAX Index is expected to generate 4.0 times less return on investment than Hon Hai. But when comparing it to its historical volatility, DAX Index is 4.66 times less risky than Hon Hai. It trades about 0.08 of its potential returns per unit of risk. Hon Hai Precision is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 580.00 in Hon Hai Precision on August 31, 2024 and sell it today you would earn a total of 510.00 from holding Hon Hai Precision or generate 87.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Hon Hai Precision
Performance |
| Timeline |
DAX Index and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Hon Hai Precision
Pair trading matchups for Hon Hai
Pair Trading with DAX Index and Hon Hai
The main advantage of trading using opposite DAX Index and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| Hon Hai vs. PLAY2CHILL SA ZY | Hon Hai vs. Cars Inc | Hon Hai vs. ANTA SPORTS PRODUCT | Hon Hai vs. INTER CARS SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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