Correlation Between DAX Index and SMA Solar
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By analyzing existing cross correlation between DAX Index and SMA Solar Technology, you can compare the effects of market volatilities on DAX Index and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and SMA Solar.
Diversification Opportunities for DAX Index and SMA Solar
Excellent diversification
The 3 months correlation between DAX and SMA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of DAX Index i.e., DAX Index and SMA Solar go up and down completely randomly.
Pair Corralation between DAX Index and SMA Solar
Assuming the 90 days trading horizon DAX Index is expected to generate 0.22 times more return on investment than SMA Solar. However, DAX Index is 4.58 times less risky than SMA Solar. It trades about 0.08 of its potential returns per unit of risk. SMA Solar Technology is currently generating about -0.07 per unit of risk. If you would invest 1,449,789 in DAX Index on September 3, 2024 and sell it today you would earn a total of 512,856 from holding DAX Index or generate 35.37% 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. SMA Solar Technology
Performance |
| Timeline |
DAX Index and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
SMA Solar Technology
Pair trading matchups for SMA Solar
Pair Trading with DAX Index and SMA Solar
The main advantage of trading using opposite DAX Index and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| DAX Index vs. SPORT LISBOA E | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. Live Nation Entertainment | DAX Index vs. Transport International Holdings |
| SMA Solar vs. SPORT LISBOA E | SMA Solar vs. Fukuyama Transporting Co | SMA Solar vs. Cardinal Health | SMA Solar vs. NTG Nordic Transport |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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