Correlation Between DAX Index and News
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By analyzing existing cross correlation between DAX Index and News Corporation, you can compare the effects of market volatilities on DAX Index and News 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 News. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and News.
Diversification Opportunities for DAX Index and News
Weak diversification
The 3 months correlation between DAX and News is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and News Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on News 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 News. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of News has no effect on the direction of DAX Index i.e., DAX Index and News go up and down completely randomly.
Pair Corralation between DAX Index and News
Assuming the 90 days trading horizon DAX Index is expected to generate 5.47 times less return on investment than News. But when comparing it to its historical volatility, DAX Index is 1.65 times less risky than News. It trades about 0.1 of its potential returns per unit of risk. News Corporation is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,660 in News Corporation on September 2, 2024 and sell it today you would earn a total of 300.00 from holding News Corporation or generate 11.28% 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. News Corp.
Performance |
| Timeline |
DAX Index and News Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
News Corporation
Pair trading matchups for News
Pair Trading with DAX Index and News
The main advantage of trading using opposite DAX Index and News positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, News 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 News will offset losses from the drop in News' long position.| DAX Index vs. FEMALE HEALTH | DAX Index vs. CDN IMPERIAL BANK | DAX Index vs. Webster Financial | DAX Index vs. Cardinal Health |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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