Correlation Between DAX Index and Procter Gamble
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By analyzing existing cross correlation between DAX Index and The Procter Gamble, you can compare the effects of market volatilities on DAX Index and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Procter Gamble.
Diversification Opportunities for DAX Index and Procter Gamble
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAX and Procter is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and The Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of DAX Index i.e., DAX Index and Procter Gamble go up and down completely randomly.
Pair Corralation between DAX Index and Procter Gamble
Assuming the 90 days trading horizon DAX Index is expected to generate 2.94 times less return on investment than Procter Gamble. But when comparing it to its historical volatility, DAX Index is 1.13 times less risky than Procter Gamble. It trades about 0.04 of its potential returns per unit of risk. The Procter Gamble is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 14,908 in The Procter Gamble on August 30, 2024 and sell it today you would earn a total of 2,140 from holding The Procter Gamble or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. The Procter Gamble
Performance |
| Timeline |
DAX Index and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
The Procter Gamble
Pair trading matchups for Procter Gamble
Pair Trading with DAX Index and Procter Gamble
The main advantage of trading using opposite DAX Index and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| DAX Index vs. NEWELL RUBBERMAID | DAX Index vs. APPLIED MATERIALS | DAX Index vs. Compagnie Plastic Omnium | DAX Index vs. Vulcan Materials |
| Procter Gamble vs. Verizon Communications | Procter Gamble vs. Lamar Advertising | Procter Gamble vs. Hemisphere Energy Corp | Procter Gamble vs. COMPUTERSHARE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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