Correlation Between DAX Index and Peoples Insurance
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By analyzing existing cross correlation between DAX Index and The Peoples Insurance, you can compare the effects of market volatilities on DAX Index and Peoples Insurance 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 Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Peoples Insurance.
Diversification Opportunities for DAX Index and Peoples Insurance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Peoples is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and The Peoples Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance 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 Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of DAX Index i.e., DAX Index and Peoples Insurance go up and down completely randomly.
Pair Corralation between DAX Index and Peoples Insurance
Assuming the 90 days trading horizon DAX Index is expected to generate 15.32 times less return on investment than Peoples Insurance. But when comparing it to its historical volatility, DAX Index is 9.5 times less risky than Peoples Insurance. It trades about 0.07 of its potential returns per unit of risk. The Peoples Insurance is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 14.00 in The Peoples Insurance on August 25, 2024 and sell it today you would earn a total of 27.00 from holding The Peoples Insurance or generate 192.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. The Peoples Insurance
Performance |
| Timeline |
DAX Index and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
The Peoples Insurance
Pair trading matchups for Peoples Insurance
Pair Trading with DAX Index and Peoples Insurance
The main advantage of trading using opposite DAX Index and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Peoples Insurance 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| DAX Index vs. Granite Construction | DAX Index vs. AGRICULTBK HADR25 YC | DAX Index vs. ADRIATIC METALS LS 013355 | DAX Index vs. GREENX METALS LTD |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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