Correlation Between DAX Index and Metso Outotec
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By analyzing existing cross correlation between DAX Index and Metso Outotec Oyj, you can compare the effects of market volatilities on DAX Index and Metso Outotec 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 Metso Outotec. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Metso Outotec.
Diversification Opportunities for DAX Index and Metso Outotec
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAX and Metso is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Metso Outotec Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metso Outotec Oyj 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 Metso Outotec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metso Outotec Oyj has no effect on the direction of DAX Index i.e., DAX Index and Metso Outotec go up and down completely randomly.
Pair Corralation between DAX Index and Metso Outotec
Assuming the 90 days trading horizon DAX Index is expected to generate 0.41 times more return on investment than Metso Outotec. However, DAX Index is 2.41 times less risky than Metso Outotec. It trades about 0.08 of its potential returns per unit of risk. Metso Outotec Oyj is currently generating about 0.01 per unit of risk. If you would invest 1,430,663 in DAX Index on September 2, 2024 and sell it today you would earn a total of 531,982 from holding DAX Index or generate 37.18% 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. Metso Outotec Oyj
Performance |
| Timeline |
DAX Index and Metso Outotec Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Metso Outotec Oyj
Pair trading matchups for Metso Outotec
Pair Trading with DAX Index and Metso Outotec
The main advantage of trading using opposite DAX Index and Metso Outotec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Metso Outotec 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 Metso Outotec will offset losses from the drop in Metso Outotec's long position.| DAX Index vs. FEMALE HEALTH | DAX Index vs. CDN IMPERIAL BANK | DAX Index vs. Webster Financial | DAX Index vs. Cardinal Health |
| Metso Outotec vs. SPORT LISBOA E | Metso Outotec vs. Columbia Sportswear | Metso Outotec vs. BII Railway Transportation | Metso Outotec vs. Sumitomo Mitsui Construction |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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