Correlation Between DAX Index and Huaneng Power
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By analyzing existing cross correlation between DAX Index and Huaneng Power International, you can compare the effects of market volatilities on DAX Index and Huaneng Power 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 Huaneng Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Huaneng Power.
Diversification Opportunities for DAX Index and Huaneng Power
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Huaneng is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Huaneng Power International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huaneng Power Intern 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 Huaneng Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huaneng Power Intern has no effect on the direction of DAX Index i.e., DAX Index and Huaneng Power go up and down completely randomly.
Pair Corralation between DAX Index and Huaneng Power
Assuming the 90 days trading horizon DAX Index is expected to generate 0.34 times more return on investment than Huaneng Power. However, DAX Index is 2.93 times less risky than Huaneng Power. It trades about -0.09 of its potential returns per unit of risk. Huaneng Power International is currently generating about -0.23 per unit of risk. If you would invest 2,042,627 in DAX Index on October 13, 2024 and sell it today you would lose (21,148) from holding DAX Index or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
DAX Index vs. Huaneng Power International
Performance |
| Timeline |
DAX Index and Huaneng Power Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Huaneng Power International
Pair trading matchups for Huaneng Power
Pair Trading with DAX Index and Huaneng Power
The main advantage of trading using opposite DAX Index and Huaneng Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Huaneng Power 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 Huaneng Power will offset losses from the drop in Huaneng Power's long position.| DAX Index vs. CAIRN HOMES EO | DAX Index vs. Forsys Metals Corp | DAX Index vs. Taylor Morrison Home | DAX Index vs. Hisense Home Appliances |
| Huaneng Power vs. Major Drilling Group | Huaneng Power vs. CVW CLEANTECH INC | Huaneng Power vs. Pembina Pipeline Corp | Huaneng Power vs. China BlueChemical |
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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