Correlation Between DAX Index and Prudential Plc
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By analyzing existing cross correlation between DAX Index and Prudential plc, you can compare the effects of market volatilities on DAX Index and Prudential Plc 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 Prudential Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Prudential Plc.
Diversification Opportunities for DAX Index and Prudential Plc
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Prudential is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Prudential plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential plc 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 Prudential Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential plc has no effect on the direction of DAX Index i.e., DAX Index and Prudential Plc go up and down completely randomly.
Pair Corralation between DAX Index and Prudential Plc
Assuming the 90 days trading horizon DAX Index is expected to generate 0.32 times more return on investment than Prudential Plc. However, DAX Index is 3.11 times less risky than Prudential Plc. It trades about 0.52 of its potential returns per unit of risk. Prudential plc is currently generating about 0.03 per unit of risk. If you would invest 1,984,877 in DAX Index on October 24, 2024 and sell it today you would earn a total of 119,323 from holding DAX Index or generate 6.01% 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. Prudential plc
Performance |
| Timeline |
DAX Index and Prudential Plc Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Prudential plc
Pair trading matchups for Prudential Plc
Pair Trading with DAX Index and Prudential Plc
The main advantage of trading using opposite DAX Index and Prudential Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Prudential Plc 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 Prudential Plc will offset losses from the drop in Prudential Plc's long position.| DAX Index vs. United Natural Foods | DAX Index vs. Salesforce | DAX Index vs. Maple Leaf Foods | DAX Index vs. MUTUIONLINE |
| Prudential Plc vs. Tradegate AG Wertpapierhandelsbank | Prudential Plc vs. The Trade Desk | Prudential Plc vs. Perdoceo Education | Prudential Plc vs. Ares Management Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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