Correlation Between DAX Index and OCBC
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By analyzing existing cross correlation between DAX Index and OCBC, you can compare the effects of market volatilities on DAX Index and OCBC 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 OCBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and OCBC.
Diversification Opportunities for DAX Index and OCBC
Very poor diversification
The 3 months correlation between DAX and OCBC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and OCBC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCBC 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 OCBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCBC has no effect on the direction of DAX Index i.e., DAX Index and OCBC go up and down completely randomly.
Pair Corralation between DAX Index and OCBC
Assuming the 90 days trading horizon DAX Index is expected to generate 1.04 times more return on investment than OCBC. However, DAX Index is 1.04 times more volatile than OCBC. It trades about 0.33 of its potential returns per unit of risk. OCBC is currently generating about 0.27 per unit of risk. If you would invest 2,128,218 in DAX Index on November 28, 2024 and sell it today you would earn a total of 151,193 from holding DAX Index or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. OCBC
Performance |
| Timeline |
DAX Index and OCBC Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
OCBC
Pair trading matchups for OCBC
Pair Trading with DAX Index and OCBC
The main advantage of trading using opposite DAX Index and OCBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, OCBC 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 OCBC will offset losses from the drop in OCBC's long position.| DAX Index vs. TRAVEL LEISURE DL 01 | DAX Index vs. COLUMBIA SPORTSWEAR | DAX Index vs. InPlay Oil Corp | DAX Index vs. MAVEN WIRELESS SWEDEN |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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