Correlation Between DAX Index and Occidental Petroleum
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By analyzing existing cross correlation between DAX Index and Occidental Petroleum, you can compare the effects of market volatilities on DAX Index and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Occidental Petroleum.
Diversification Opportunities for DAX Index and Occidental Petroleum
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Occidental is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of DAX Index i.e., DAX Index and Occidental Petroleum go up and down completely randomly.
Pair Corralation between DAX Index and Occidental Petroleum
Assuming the 90 days trading horizon DAX Index is expected to generate 0.47 times more return on investment than Occidental Petroleum. However, DAX Index is 2.15 times less risky than Occidental Petroleum. It trades about 0.19 of its potential returns per unit of risk. Occidental Petroleum is currently generating about 0.0 per unit of risk. If you would invest 1,851,839 in DAX Index on September 12, 2024 and sell it today you would earn a total of 188,077 from holding DAX Index or generate 10.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Occidental Petroleum
Performance |
| Timeline |
DAX Index and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Occidental Petroleum
Pair trading matchups for Occidental Petroleum
Pair Trading with DAX Index and Occidental Petroleum
The main advantage of trading using opposite DAX Index and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| DAX Index vs. Consolidated Communications Holdings | DAX Index vs. Spirent Communications plc | DAX Index vs. Gamma Communications plc | DAX Index vs. CITIC Telecom International |
| Occidental Petroleum vs. GRIFFIN MINING LTD | Occidental Petroleum vs. SCANSOURCE | Occidental Petroleum vs. Lion One Metals | Occidental Petroleum vs. Tsingtao Brewery |
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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