Correlation Between DAX Index and NEW WORLD
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By analyzing existing cross correlation between DAX Index and NEW WORLD DEVCO, you can compare the effects of market volatilities on DAX Index and NEW WORLD 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 NEW WORLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and NEW WORLD.
Diversification Opportunities for DAX Index and NEW WORLD
Excellent diversification
The 3 months correlation between DAX and NEW is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and NEW WORLD DEVCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW WORLD DEVCO 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 NEW WORLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW WORLD DEVCO has no effect on the direction of DAX Index i.e., DAX Index and NEW WORLD go up and down completely randomly.
Pair Corralation between DAX Index and NEW WORLD
Assuming the 90 days trading horizon DAX Index is expected to generate 0.23 times more return on investment than NEW WORLD. However, DAX Index is 4.28 times less risky than NEW WORLD. It trades about 0.09 of its potential returns per unit of risk. NEW WORLD DEVCO is currently generating about -0.04 per unit of risk. If you would invest 1,418,167 in DAX Index on September 24, 2024 and sell it today you would earn a total of 570,308 from holding DAX Index or generate 40.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. NEW WORLD DEVCO
Performance |
| Timeline |
DAX Index and NEW WORLD Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
NEW WORLD DEVCO
Pair trading matchups for NEW WORLD
Pair Trading with DAX Index and NEW WORLD
The main advantage of trading using opposite DAX Index and NEW WORLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, NEW WORLD 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 NEW WORLD will offset losses from the drop in NEW WORLD's long position.| DAX Index vs. Seven West Media | DAX Index vs. TERADATA | DAX Index vs. DICKER DATA LTD | DAX Index vs. Datang International Power |
| NEW WORLD vs. OPEN HOUSE GROUP | NEW WORLD vs. AEON MALL LTD | NEW WORLD vs. Hufvudstaden AB | NEW WORLD vs. FRASERS PROPERTY |
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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