Correlation Between DAX Index and HMS Bergbau
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By analyzing existing cross correlation between DAX Index and HMS Bergbau AG, you can compare the effects of market volatilities on DAX Index and HMS Bergbau 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 HMS Bergbau. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and HMS Bergbau.
Diversification Opportunities for DAX Index and HMS Bergbau
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and HMS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG 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 HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of DAX Index i.e., DAX Index and HMS Bergbau go up and down completely randomly.
Pair Corralation between DAX Index and HMS Bergbau
Assuming the 90 days trading horizon DAX Index is expected to generate 2.0 times less return on investment than HMS Bergbau. But when comparing it to its historical volatility, DAX Index is 1.08 times less risky than HMS Bergbau. It trades about 0.1 of its potential returns per unit of risk. HMS Bergbau AG is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,044 in HMS Bergbau AG on September 4, 2024 and sell it today you would earn a total of 876.00 from holding HMS Bergbau AG or generate 42.86% 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. HMS Bergbau AG
Performance |
| Timeline |
DAX Index and HMS Bergbau Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
HMS Bergbau AG
Pair trading matchups for HMS Bergbau
Pair Trading with DAX Index and HMS Bergbau
The main advantage of trading using opposite DAX Index and HMS Bergbau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, HMS Bergbau 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 HMS Bergbau will offset losses from the drop in HMS Bergbau's long position.| DAX Index vs. LION ONE METALS | DAX Index vs. KENNAMETAL INC | DAX Index vs. HYATT HOTELS A | DAX Index vs. Zijin Mining Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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