Correlation Between DAX Index and Japan Asia
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By analyzing existing cross correlation between DAX Index and Japan Asia Investment, you can compare the effects of market volatilities on DAX Index and Japan Asia 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 Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Japan Asia.
Diversification Opportunities for DAX Index and Japan Asia
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and Japan is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Japan Asia Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Asia Investment 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 Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Asia Investment has no effect on the direction of DAX Index i.e., DAX Index and Japan Asia go up and down completely randomly.
Pair Corralation between DAX Index and Japan Asia
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Japan Asia. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 1.56 times less risky than Japan Asia. The index trades about -0.05 of its potential returns per unit of risk. The Japan Asia Investment is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Japan Asia Investment on August 30, 2024 and sell it today you would earn a total of 7.00 from holding Japan Asia Investment or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Japan Asia Investment
Performance |
| Timeline |
DAX Index and Japan Asia Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Japan Asia Investment
Pair trading matchups for Japan Asia
Pair Trading with DAX Index and Japan Asia
The main advantage of trading using opposite DAX Index and Japan Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Japan Asia 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 Asia will offset losses from the drop in Japan Asia's long position.| DAX Index vs. NEWELL RUBBERMAID | DAX Index vs. APPLIED MATERIALS | DAX Index vs. Compagnie Plastic Omnium | DAX Index vs. Vulcan Materials |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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