Correlation Between DAX Index and Japan Steel
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By analyzing existing cross correlation between DAX Index and The Japan Steel, you can compare the effects of market volatilities on DAX Index and Japan Steel 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 Japan Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Japan Steel.
Diversification Opportunities for DAX Index and Japan Steel
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Japan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and The Japan Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Steel 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 Japan Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Steel has no effect on the direction of DAX Index i.e., DAX Index and Japan Steel go up and down completely randomly.
Pair Corralation between DAX Index and Japan Steel
Assuming the 90 days trading horizon DAX Index is expected to generate 0.26 times more return on investment than Japan Steel. However, DAX Index is 3.87 times less risky than Japan Steel. It trades about 0.0 of its potential returns per unit of risk. The Japan Steel is currently generating about -0.18 per unit of risk. If you would invest 2,034,596 in DAX Index on October 10, 2024 and sell it today you would lose (1,602) from holding DAX Index or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. The Japan Steel
Performance |
| Timeline |
DAX Index and Japan Steel Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
The Japan Steel
Pair trading matchups for Japan Steel
Pair Trading with DAX Index and Japan Steel
The main advantage of trading using opposite DAX Index and Japan Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Japan Steel 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 Japan Steel will offset losses from the drop in Japan Steel's long position.| DAX Index vs. CHINA SOUTHN AIR H | DAX Index vs. Corsair Gaming | DAX Index vs. APPLIED MATERIALS | DAX Index vs. Air New Zealand |
| Japan Steel vs. CONTAGIOUS GAMING INC | Japan Steel vs. SALESFORCE INC CDR | Japan Steel vs. HOCHSCHILD MINING | Japan Steel vs. International Game Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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