Correlation Between DAX Index and Neoen SA
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By analyzing existing cross correlation between DAX Index and Neoen SA, you can compare the effects of market volatilities on DAX Index and Neoen SA 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 Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Neoen SA.
Diversification Opportunities for DAX Index and Neoen SA
Poor diversification
The 3 months correlation between DAX and Neoen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen SA 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 Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of DAX Index i.e., DAX Index and Neoen SA go up and down completely randomly.
Pair Corralation between DAX Index and Neoen SA
Assuming the 90 days trading horizon DAX Index is expected to generate 0.41 times more return on investment than Neoen SA. However, DAX Index is 2.42 times less risky than Neoen SA. It trades about 0.09 of its potential returns per unit of risk. Neoen SA is currently generating about 0.01 per unit of risk. If you would invest 1,398,623 in DAX Index on September 5, 2024 and sell it today you would earn a total of 603,052 from holding DAX Index or generate 43.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
DAX Index vs. Neoen SA
Performance |
| Timeline |
DAX Index and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Neoen SA
Pair trading matchups for Neoen SA
Pair Trading with DAX Index and Neoen SA
The main advantage of trading using opposite DAX Index and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Neoen SA 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 Neoen SA will offset losses from the drop in Neoen SA's long position.| DAX Index vs. Hochschild Mining plc | DAX Index vs. Ming Le Sports | DAX Index vs. PLAYSTUDIOS A DL 0001 | DAX Index vs. USWE SPORTS AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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