Correlation Between DAX Index and RELX PLC
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By analyzing existing cross correlation between DAX Index and RELX PLC, you can compare the effects of market volatilities on DAX Index and RELX 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 RELX PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and RELX PLC.
Diversification Opportunities for DAX Index and RELX PLC
Very poor diversification
The 3 months correlation between DAX and RELX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and RELX PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELX 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 RELX PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELX PLC has no effect on the direction of DAX Index i.e., DAX Index and RELX PLC go up and down completely randomly.
Pair Corralation between DAX Index and RELX PLC
Assuming the 90 days trading horizon DAX Index is expected to generate 0.55 times more return on investment than RELX PLC. However, DAX Index is 1.8 times less risky than RELX PLC. It trades about 0.54 of its potential returns per unit of risk. RELX PLC is currently generating about 0.29 per unit of risk. If you would invest 1,998,432 in DAX Index on October 28, 2024 and sell it today you would earn a total of 141,061 from holding DAX Index or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. RELX PLC
Performance |
| Timeline |
DAX Index and RELX PLC Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
RELX PLC
Pair trading matchups for RELX PLC
Pair Trading with DAX Index and RELX PLC
The main advantage of trading using opposite DAX Index and RELX PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, RELX 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 RELX PLC will offset losses from the drop in RELX PLC's long position.| DAX Index vs. DFS Furniture PLC | DAX Index vs. X FAB Silicon Foundries | DAX Index vs. HOME DEPOT | DAX Index vs. Micron Technology |
| RELX PLC vs. Relx PLC ADR | RELX PLC vs. Wolters Kluwer NV | RELX PLC vs. WOLTERS KLUWER ADR | RELX PLC vs. Informa PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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