Correlation Between DAX Index and KBC Group
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By analyzing existing cross correlation between DAX Index and KBC Group NV, you can compare the effects of market volatilities on DAX Index and KBC Group 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 KBC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and KBC Group.
Diversification Opportunities for DAX Index and KBC Group
Poor diversification
The 3 months correlation between DAX and KBC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and KBC Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Group NV 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 KBC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Group NV has no effect on the direction of DAX Index i.e., DAX Index and KBC Group go up and down completely randomly.
Pair Corralation between DAX Index and KBC Group
Assuming the 90 days trading horizon DAX Index is expected to generate 0.88 times more return on investment than KBC Group. However, DAX Index is 1.13 times less risky than KBC Group. It trades about 0.1 of its potential returns per unit of risk. KBC Group NV is currently generating about -0.03 per unit of risk. If you would invest 2,031,381 in DAX Index on October 17, 2024 and sell it today you would earn a total of 26,087 from holding DAX Index or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
DAX Index vs. KBC Group NV
Performance |
| Timeline |
DAX Index and KBC Group Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
KBC Group NV
Pair trading matchups for KBC Group
Pair Trading with DAX Index and KBC Group
The main advantage of trading using opposite DAX Index and KBC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, KBC Group 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 KBC Group will offset losses from the drop in KBC Group's long position.| DAX Index vs. CyberArk Software | DAX Index vs. Lendlease Group | DAX Index vs. PSI Software AG | DAX Index vs. Take Two Interactive Software |
| KBC Group vs. Cars Inc | KBC Group vs. United Insurance Holdings | KBC Group vs. SBI Insurance Group | KBC Group vs. Direct Line Insurance |
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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