Correlation Between DAX Index and Loblaw Companies
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By analyzing existing cross correlation between DAX Index and Loblaw Companies Limited, you can compare the effects of market volatilities on DAX Index and Loblaw Companies 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 Loblaw Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Loblaw Companies.
Diversification Opportunities for DAX Index and Loblaw Companies
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Loblaw is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Loblaw Companies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loblaw Companies 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 Loblaw Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loblaw Companies has no effect on the direction of DAX Index i.e., DAX Index and Loblaw Companies go up and down completely randomly.
Pair Corralation between DAX Index and Loblaw Companies
Assuming the 90 days trading horizon DAX Index is expected to generate 2.45 times less return on investment than Loblaw Companies. But when comparing it to its historical volatility, DAX Index is 1.58 times less risky than Loblaw Companies. It trades about 0.07 of its potential returns per unit of risk. Loblaw Companies Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 9,470 in Loblaw Companies Limited on September 1, 2024 and sell it today you would earn a total of 2,730 from holding Loblaw Companies Limited or generate 28.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Loblaw Companies Limited
Performance |
| Timeline |
DAX Index and Loblaw Companies Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Loblaw Companies Limited
Pair trading matchups for Loblaw Companies
Pair Trading with DAX Index and Loblaw Companies
The main advantage of trading using opposite DAX Index and Loblaw Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Loblaw Companies 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 Loblaw Companies will offset losses from the drop in Loblaw Companies' long position.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| Loblaw Companies vs. POWER METALS | Loblaw Companies vs. Singapore Telecommunications Limited | Loblaw Companies vs. AWILCO DRILLING PLC | Loblaw Companies vs. Citic Telecom International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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