Correlation Between DAX Index and Nike
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By analyzing existing cross correlation between DAX Index and Nike Inc, you can compare the effects of market volatilities on DAX Index and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Nike.
Diversification Opportunities for DAX Index and Nike
Average diversification
The 3 months correlation between DAX and Nike is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of DAX Index i.e., DAX Index and Nike go up and down completely randomly.
Pair Corralation between DAX Index and Nike
Assuming the 90 days trading horizon DAX Index is expected to generate 0.57 times more return on investment than Nike. However, DAX Index is 1.76 times less risky than Nike. It trades about 0.23 of its potential returns per unit of risk. Nike Inc is currently generating about -0.01 per unit of risk. If you would invest 2,034,596 in DAX Index on December 7, 2024 and sell it today you would earn a total of 307,352 from holding DAX Index or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
DAX Index vs. Nike Inc
Performance |
| Timeline |
DAX Index and Nike Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Nike Inc
Pair trading matchups for Nike
Pair Trading with DAX Index and Nike
The main advantage of trading using opposite DAX Index and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike's long position.| DAX Index vs. Sims Metal Management | DAX Index vs. Air Products and | DAX Index vs. CHEMICAL INDUSTRIES | DAX Index vs. Silicon Motion Technology |
| Nike vs. FLOW TRADERS LTD | Nike vs. Fast Retailing Co | Nike vs. United Microelectronics Corp | Nike vs. Tradegate AG Wertpapierhandelsbank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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