Correlation Between DAX Index and National Bank
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By analyzing existing cross correlation between DAX Index and National Bank Holdings, you can compare the effects of market volatilities on DAX Index and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and National Bank.
Diversification Opportunities for DAX Index and National Bank
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAX and National is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and National Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank Holdings 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank Holdings has no effect on the direction of DAX Index i.e., DAX Index and National Bank go up and down completely randomly.
Pair Corralation between DAX Index and National Bank
Assuming the 90 days trading horizon DAX Index is expected to under-perform the National Bank. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 3.43 times less risky than National Bank. The index trades about -0.05 of its potential returns per unit of risk. The National Bank Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,020 in National Bank Holdings on August 29, 2024 and sell it today you would earn a total of 600.00 from holding National Bank Holdings or generate 14.93% 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. National Bank Holdings
Performance |
| Timeline |
DAX Index and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
National Bank Holdings
Pair trading matchups for National Bank
Pair Trading with DAX Index and National Bank
The main advantage of trading using opposite DAX Index and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| DAX Index vs. Gladstone Investment | DAX Index vs. REINET INVESTMENTS SCA | DAX Index vs. CarsalesCom | DAX Index vs. MARKET VECTR RETAIL |
| National Bank vs. Austevoll Seafood ASA | National Bank vs. Webster Financial | National Bank vs. CONAGRA FOODS | National Bank vs. Beyond Meat |
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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