Correlation Between DAX Index and E3 LITHIUM
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By analyzing existing cross correlation between DAX Index and E3 LITHIUM LTD, you can compare the effects of market volatilities on DAX Index and E3 LITHIUM 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 E3 LITHIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and E3 LITHIUM.
Diversification Opportunities for DAX Index and E3 LITHIUM
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and OW3 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and E3 LITHIUM LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E3 LITHIUM LTD 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 E3 LITHIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E3 LITHIUM LTD has no effect on the direction of DAX Index i.e., DAX Index and E3 LITHIUM go up and down completely randomly.
Pair Corralation between DAX Index and E3 LITHIUM
Assuming the 90 days trading horizon DAX Index is expected to generate 1.6 times less return on investment than E3 LITHIUM. But when comparing it to its historical volatility, DAX Index is 5.75 times less risky than E3 LITHIUM. It trades about 0.58 of its potential returns per unit of risk. E3 LITHIUM LTD is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 58.00 in E3 LITHIUM LTD on October 25, 2024 and sell it today you would earn a total of 6.00 from holding E3 LITHIUM LTD or generate 10.34% 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. E3 LITHIUM LTD
Performance |
| Timeline |
DAX Index and E3 LITHIUM Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
E3 LITHIUM LTD
Pair trading matchups for E3 LITHIUM
Pair Trading with DAX Index and E3 LITHIUM
The main advantage of trading using opposite DAX Index and E3 LITHIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, E3 LITHIUM 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 E3 LITHIUM will offset losses from the drop in E3 LITHIUM's long position.| DAX Index vs. Retail Estates NV | DAX Index vs. AEON STORES | DAX Index vs. BJs Wholesale Club | DAX Index vs. Nanjing Panda Electronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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