Correlation Between DAX Index and Relx PLC
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By analyzing existing cross correlation between DAX Index and Relx PLC ADR, 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 0.83. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Relx PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Relx PLC ADR 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 ADR 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 1.8 times less return on investment than Relx PLC. But when comparing it to its historical volatility, DAX Index is 1.49 times less risky than Relx PLC. It trades about 0.09 of its potential returns per unit of risk. Relx PLC ADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,587 in Relx PLC ADR on October 29, 2024 and sell it today you would earn a total of 2,053 from holding Relx PLC ADR or generate 79.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
DAX Index vs. Relx PLC ADR
Performance |
| Timeline |
DAX Index and Relx PLC Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Relx PLC ADR
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. Tianjin Capital Environmental | DAX Index vs. Cars Inc | DAX Index vs. INTER CARS SA | DAX Index vs. Khiron Life Sciences |
| Relx PLC vs. RELX PLC | 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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