Correlation Between DAX Index and Inchcape Plc
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By analyzing existing cross correlation between DAX Index and Inchcape plc, you can compare the effects of market volatilities on DAX Index and Inchcape Plc 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 Inchcape Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Inchcape Plc.
Diversification Opportunities for DAX Index and Inchcape Plc
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Inchcape is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Inchcape plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inchcape plc 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 Inchcape Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inchcape plc has no effect on the direction of DAX Index i.e., DAX Index and Inchcape Plc go up and down completely randomly.
Pair Corralation between DAX Index and Inchcape Plc
Assuming the 90 days trading horizon DAX Index is expected to generate 0.38 times more return on investment than Inchcape Plc. However, DAX Index is 2.62 times less risky than Inchcape Plc. It trades about 0.08 of its potential returns per unit of risk. Inchcape plc is currently generating about 0.0 per unit of risk. If you would invest 1,510,295 in DAX Index on October 13, 2024 and sell it today you would earn a total of 511,184 from holding DAX Index or generate 33.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Inchcape plc
Performance |
| Timeline |
DAX Index and Inchcape Plc Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Inchcape plc
Pair trading matchups for Inchcape Plc
Pair Trading with DAX Index and Inchcape Plc
The main advantage of trading using opposite DAX Index and Inchcape Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Inchcape Plc 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 Inchcape Plc will offset losses from the drop in Inchcape Plc'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 |
| Inchcape Plc vs. RETAIL FOOD GROUP | Inchcape Plc vs. FAST RETAIL ADR | Inchcape Plc vs. TITANIUM TRANSPORTGROUP | Inchcape Plc vs. Fast Retailing Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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