Correlation Between DAX Index and Nippon Light
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By analyzing existing cross correlation between DAX Index and Nippon Light Metal, you can compare the effects of market volatilities on DAX Index and Nippon Light 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 Nippon Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Nippon Light.
Diversification Opportunities for DAX Index and Nippon Light
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Nippon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Nippon Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Light Metal 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 Nippon Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Light Metal has no effect on the direction of DAX Index i.e., DAX Index and Nippon Light go up and down completely randomly.
Pair Corralation between DAX Index and Nippon Light
Assuming the 90 days trading horizon DAX Index is expected to generate 0.49 times more return on investment than Nippon Light. However, DAX Index is 2.04 times less risky than Nippon Light. It trades about -0.01 of its potential returns per unit of risk. Nippon Light Metal is currently generating about -0.04 per unit of risk. If you would invest 1,947,807 in DAX Index on August 30, 2024 and sell it today you would lose (5,234) from holding DAX Index or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Nippon Light Metal
Performance |
| Timeline |
DAX Index and Nippon Light Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Nippon Light Metal
Pair trading matchups for Nippon Light
Pair Trading with DAX Index and Nippon Light
The main advantage of trading using opposite DAX Index and Nippon Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Nippon Light 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 Nippon Light will offset losses from the drop in Nippon Light's long position.| DAX Index vs. NEWELL RUBBERMAID | DAX Index vs. APPLIED MATERIALS | DAX Index vs. Compagnie Plastic Omnium | DAX Index vs. Vulcan Materials |
| Nippon Light vs. AGRICULTBK HADR25 YC | Nippon Light vs. Mitsubishi Gas Chemical | Nippon Light vs. DAIRY FARM INTL | Nippon Light vs. Daito Trust 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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