Correlation Between DAX Index and IShares Public
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By analyzing existing cross correlation between DAX Index and iShares Public Limited, you can compare the effects of market volatilities on DAX Index and IShares Public 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 IShares Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and IShares Public.
Diversification Opportunities for DAX Index and IShares Public
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and IShares is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and iShares Public Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Public 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 IShares Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Public has no effect on the direction of DAX Index i.e., DAX Index and IShares Public go up and down completely randomly.
Pair Corralation between DAX Index and IShares Public
Assuming the 90 days trading horizon DAX Index is expected to generate 0.75 times more return on investment than IShares Public. However, DAX Index is 1.33 times less risky than IShares Public. It trades about 0.5 of its potential returns per unit of risk. iShares Public Limited is currently generating about 0.27 per unit of risk. If you would invest 1,903,364 in DAX Index on September 13, 2024 and sell it today you would earn a total of 136,552 from holding DAX Index or generate 7.17% 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. iShares Public Limited
Performance |
| Timeline |
DAX Index and IShares Public Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
iShares Public Limited
Pair trading matchups for IShares Public
Pair Trading with DAX Index and IShares Public
The main advantage of trading using opposite DAX Index and IShares Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, IShares Public 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 IShares Public will offset losses from the drop in IShares Public'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 |
| IShares Public vs. iShares Govt Bond | IShares Public vs. iShares Global AAA AA | IShares Public vs. iShares Smart City | IShares Public vs. iShares Broad High |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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