Correlation Between DAX Index and RWE AG
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By analyzing existing cross correlation between DAX Index and RWE AG, you can compare the effects of market volatilities on DAX Index and RWE AG 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 RWE AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and RWE AG.
Diversification Opportunities for DAX Index and RWE AG
Excellent diversification
The 3 months correlation between DAX and RWE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and RWE AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RWE AG 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 RWE AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RWE AG has no effect on the direction of DAX Index i.e., DAX Index and RWE AG go up and down completely randomly.
Pair Corralation between DAX Index and RWE AG
Assuming the 90 days trading horizon DAX Index is expected to generate 0.81 times more return on investment than RWE AG. However, DAX Index is 1.24 times less risky than RWE AG. It trades about 0.33 of its potential returns per unit of risk. RWE AG is currently generating about -0.11 per unit of risk. If you would invest 2,104,200 in DAX Index on November 22, 2024 and sell it today you would earn a total of 139,163 from holding DAX Index or generate 6.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. RWE AG
Performance |
| Timeline |
DAX Index and RWE AG Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
RWE AG
Pair trading matchups for RWE AG
Pair Trading with DAX Index and RWE AG
The main advantage of trading using opposite DAX Index and RWE AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, RWE AG 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 RWE AG will offset losses from the drop in RWE AG's long position.| DAX Index vs. Compagnie Plastic Omnium | DAX Index vs. Mitsubishi Materials | DAX Index vs. Vulcan Materials | DAX Index vs. Gruppo Mutuionline SpA |
| RWE AG vs. REGAL ASIAN INVESTMENTS | RWE AG vs. Diversified Healthcare Trust | RWE AG vs. De Grey Mining | RWE AG vs. SLR Investment 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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