Correlation Between DAX Index and ADTRAN Holdings
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By analyzing existing cross correlation between DAX Index and ADTRAN Holdings, you can compare the effects of market volatilities on DAX Index and ADTRAN Holdings 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 ADTRAN Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and ADTRAN Holdings.
Diversification Opportunities for DAX Index and ADTRAN Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and ADTRAN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and ADTRAN Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADTRAN Holdings 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 ADTRAN Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADTRAN Holdings has no effect on the direction of DAX Index i.e., DAX Index and ADTRAN Holdings go up and down completely randomly.
Pair Corralation between DAX Index and ADTRAN Holdings
Assuming the 90 days trading horizon DAX Index is expected to generate 0.21 times more return on investment than ADTRAN Holdings. However, DAX Index is 4.78 times less risky than ADTRAN Holdings. It trades about 0.07 of its potential returns per unit of risk. ADTRAN Holdings is currently generating about 0.01 per unit of risk. If you would invest 1,609,787 in DAX Index on September 2, 2024 and sell it today you would earn a total of 352,858 from holding DAX Index or generate 21.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. ADTRAN Holdings
Performance |
| Timeline |
DAX Index and ADTRAN Holdings Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
ADTRAN Holdings
Pair trading matchups for ADTRAN Holdings
Pair Trading with DAX Index and ADTRAN Holdings
The main advantage of trading using opposite DAX Index and ADTRAN Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, ADTRAN Holdings 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 ADTRAN Holdings will offset losses from the drop in ADTRAN Holdings' long position.| DAX Index vs. FEMALE HEALTH | DAX Index vs. CDN IMPERIAL BANK | DAX Index vs. Webster Financial | DAX Index vs. Cardinal Health |
| ADTRAN Holdings vs. Apple Inc | ADTRAN Holdings vs. Apple Inc | ADTRAN Holdings vs. Apple Inc | ADTRAN Holdings vs. Apple Inc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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