Correlation Between DAX Index and Iberdrola
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By analyzing existing cross correlation between DAX Index and Iberdrola SA, you can compare the effects of market volatilities on DAX Index and Iberdrola 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 Iberdrola. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Iberdrola.
Diversification Opportunities for DAX Index and Iberdrola
Significant diversification
The 3 months correlation between DAX and Iberdrola is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Iberdrola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iberdrola SA 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 Iberdrola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iberdrola SA has no effect on the direction of DAX Index i.e., DAX Index and Iberdrola go up and down completely randomly.
Pair Corralation between DAX Index and Iberdrola
Assuming the 90 days trading horizon DAX Index is expected to generate 0.52 times more return on investment than Iberdrola. However, DAX Index is 1.92 times less risky than Iberdrola. It trades about 0.14 of its potential returns per unit of risk. Iberdrola SA is currently generating about -0.06 per unit of risk. If you would invest 1,950,829 in DAX Index on September 13, 2024 and sell it today you would earn a total of 91,798 from holding DAX Index or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
DAX Index vs. Iberdrola SA
Performance |
| Timeline |
DAX Index and Iberdrola Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Iberdrola SA
Pair trading matchups for Iberdrola
Pair Trading with DAX Index and Iberdrola
The main advantage of trading using opposite DAX Index and Iberdrola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Iberdrola 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 Iberdrola will offset losses from the drop in Iberdrola's long position.| DAX Index vs. Consolidated Communications Holdings | DAX Index vs. Spirent Communications plc | DAX Index vs. Gamma Communications plc | DAX Index vs. CITIC Telecom International |
| Iberdrola vs. Heidelberg Materials AG | Iberdrola vs. Hyster Yale Materials Handling | Iberdrola vs. NEWELL RUBBERMAID | Iberdrola vs. Citic Telecom International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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