Correlation Between DAX Index and LKQ
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By analyzing existing cross correlation between DAX Index and LKQ Corporation, you can compare the effects of market volatilities on DAX Index and LKQ 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 LKQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and LKQ.
Diversification Opportunities for DAX Index and LKQ
Very good diversification
The 3 months correlation between DAX and LKQ is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and LKQ Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LKQ Corporation 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 LKQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LKQ Corporation has no effect on the direction of DAX Index i.e., DAX Index and LKQ go up and down completely randomly.
Pair Corralation between DAX Index and LKQ
Assuming the 90 days trading horizon DAX Index is expected to generate 7.29 times less return on investment than LKQ. But when comparing it to its historical volatility, DAX Index is 2.13 times less risky than LKQ. It trades about 0.02 of its potential returns per unit of risk. LKQ Corporation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,550 in LKQ Corporation on August 31, 2024 and sell it today you would earn a total of 150.00 from holding LKQ Corporation or generate 4.23% 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. LKQ Corp.
Performance |
| Timeline |
DAX Index and LKQ Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
LKQ Corporation
Pair trading matchups for LKQ
Pair Trading with DAX Index and LKQ
The main advantage of trading using opposite DAX Index and LKQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, LKQ 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 LKQ will offset losses from the drop in LKQ's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| LKQ vs. PT Astra International | LKQ vs. Magna International | LKQ vs. Fuyao Glass Industry | LKQ vs. Superior Plus Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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