Correlation Between DAX Index and Longfor Group
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By analyzing existing cross correlation between DAX Index and Longfor Group Holdings, you can compare the effects of market volatilities on DAX Index and Longfor Group 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 Longfor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Longfor Group.
Diversification Opportunities for DAX Index and Longfor Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Longfor is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Longfor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longfor Group 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 Longfor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longfor Group Holdings has no effect on the direction of DAX Index i.e., DAX Index and Longfor Group go up and down completely randomly.
Pair Corralation between DAX Index and Longfor Group
Assuming the 90 days trading horizon DAX Index is expected to generate 3.47 times less return on investment than Longfor Group. But when comparing it to its historical volatility, DAX Index is 7.83 times less risky than Longfor Group. It trades about 0.08 of its potential returns per unit of risk. Longfor Group Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 101.00 in Longfor Group Holdings on August 29, 2024 and sell it today you would earn a total of 24.00 from holding Longfor Group Holdings or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Longfor Group Holdings
Performance |
| Timeline |
DAX Index and Longfor Group Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Longfor Group Holdings
Pair trading matchups for Longfor Group
Pair Trading with DAX Index and Longfor Group
The main advantage of trading using opposite DAX Index and Longfor Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Longfor Group 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 Longfor Group will offset losses from the drop in Longfor Group's long position.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Longfor Group vs. ETFS Coffee ETC | Longfor Group vs. Zijin Mining Group | Longfor Group vs. LGI Homes | Longfor Group vs. GALENA MINING LTD |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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