Correlation Between DAX Index and Northern Trust
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By analyzing existing cross correlation between DAX Index and Northern Trust, you can compare the effects of market volatilities on DAX Index and Northern Trust 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 Northern Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Northern Trust.
Diversification Opportunities for DAX Index and Northern Trust
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Northern is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Northern Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Trust 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 Northern Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Trust has no effect on the direction of DAX Index i.e., DAX Index and Northern Trust go up and down completely randomly.
Pair Corralation between DAX Index and Northern Trust
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Northern Trust. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 1.73 times less risky than Northern Trust. The index trades about -0.03 of its potential returns per unit of risk. The Northern Trust is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 9,300 in Northern Trust on August 28, 2024 and sell it today you would earn a total of 1,200 from holding Northern Trust or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Northern Trust
Performance |
| Timeline |
DAX Index and Northern Trust Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Northern Trust
Pair trading matchups for Northern Trust
Pair Trading with DAX Index and Northern Trust
The main advantage of trading using opposite DAX Index and Northern Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Northern Trust 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 Northern Trust will offset losses from the drop in Northern Trust's long position.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Northern Trust vs. Coor Service Management | Northern Trust vs. Corsair Gaming | Northern Trust vs. MYFAIR GOLD P | Northern Trust vs. Ryanair Holdings plc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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