Correlation Between DAX Index and Lion One
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By analyzing existing cross correlation between DAX Index and Lion One Metals, you can compare the effects of market volatilities on DAX Index and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Lion One.
Diversification Opportunities for DAX Index and Lion One
Poor diversification
The 3 months correlation between DAX and Lion is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of DAX Index i.e., DAX Index and Lion One go up and down completely randomly.
Pair Corralation between DAX Index and Lion One
Assuming the 90 days trading horizon DAX Index is expected to generate 0.16 times more return on investment than Lion One. However, DAX Index is 6.19 times less risky than Lion One. It trades about 0.08 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.02 per unit of risk. If you would invest 1,598,996 in DAX Index on August 31, 2024 and sell it today you would earn a total of 363,649 from holding DAX Index or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
DAX Index vs. Lion One Metals
Performance |
| Timeline |
DAX Index and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Lion One Metals
Pair trading matchups for Lion One
Pair Trading with DAX Index and Lion One
The main advantage of trading using opposite DAX Index and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings | Lion One vs. Origin Agritech |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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