Correlation Between DAX Index and INDIKA ENERGY
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By analyzing existing cross correlation between DAX Index and INDIKA ENERGY, you can compare the effects of market volatilities on DAX Index and INDIKA ENERGY 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 INDIKA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and INDIKA ENERGY.
Diversification Opportunities for DAX Index and INDIKA ENERGY
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and INDIKA is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and INDIKA ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDIKA ENERGY 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 INDIKA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDIKA ENERGY has no effect on the direction of DAX Index i.e., DAX Index and INDIKA ENERGY go up and down completely randomly.
Pair Corralation between DAX Index and INDIKA ENERGY
Assuming the 90 days trading horizon DAX Index is expected to generate 0.23 times more return on investment than INDIKA ENERGY. However, DAX Index is 4.27 times less risky than INDIKA ENERGY. It trades about 0.1 of its potential returns per unit of risk. INDIKA ENERGY is currently generating about -0.01 per unit of risk. If you would invest 1,563,321 in DAX Index on November 28, 2024 and sell it today you would earn a total of 677,706 from holding DAX Index or generate 43.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. INDIKA ENERGY
Performance |
| Timeline |
DAX Index and INDIKA ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
INDIKA ENERGY
Pair trading matchups for INDIKA ENERGY
Pair Trading with DAX Index and INDIKA ENERGY
The main advantage of trading using opposite DAX Index and INDIKA ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, INDIKA ENERGY 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 INDIKA ENERGY will offset losses from the drop in INDIKA ENERGY's long position.| DAX Index vs. TRAVEL LEISURE DL 01 | DAX Index vs. COLUMBIA SPORTSWEAR | DAX Index vs. InPlay Oil Corp | DAX Index vs. MAVEN WIRELESS SWEDEN |
| INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc | INDIKA ENERGY vs. Apple Inc |
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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