Correlation Between DAX Index and Intercontinental
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By analyzing existing cross correlation between DAX Index and Intercontinental Exchange, you can compare the effects of market volatilities on DAX Index and Intercontinental 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 Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Intercontinental.
Diversification Opportunities for DAX Index and Intercontinental
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAX and Intercontinental is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange 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 Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of DAX Index i.e., DAX Index and Intercontinental go up and down completely randomly.
Pair Corralation between DAX Index and Intercontinental
Assuming the 90 days trading horizon DAX Index is expected to generate 0.44 times more return on investment than Intercontinental. However, DAX Index is 2.29 times less risky than Intercontinental. It trades about 0.19 of its potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.04 per unit of risk. If you would invest 1,851,839 in DAX Index on September 12, 2024 and sell it today you would earn a total of 188,077 from holding DAX Index or generate 10.16% 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. Intercontinental Exchange
Performance |
| Timeline |
DAX Index and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Intercontinental Exchange
Pair trading matchups for Intercontinental
Pair Trading with DAX Index and Intercontinental
The main advantage of trading using opposite DAX Index and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Intercontinental 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 Intercontinental will offset losses from the drop in Intercontinental'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 |
| Intercontinental vs. Bumrungrad Hospital Public | Intercontinental vs. Virtus Investment Partners | Intercontinental vs. DiamondRock Hospitality | Intercontinental vs. YOOMA WELLNESS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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