Correlation Between DAX Index and SDAX Index
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By analyzing existing cross correlation between DAX Index and SDAX Index, you can compare the effects of market volatilities on DAX Index and SDAX Index 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 SDAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and SDAX Index.
Diversification Opportunities for DAX Index and SDAX Index
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DAX and SDAX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and SDAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SDAX Index 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 SDAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SDAX Index has no effect on the direction of DAX Index i.e., DAX Index and SDAX Index go up and down completely randomly.
Pair Corralation between DAX Index and SDAX Index
Assuming the 90 days trading horizon DAX Index is expected to generate 0.79 times more return on investment than SDAX Index. However, DAX Index is 1.26 times less risky than SDAX Index. It trades about 0.08 of its potential returns per unit of risk. SDAX Index is currently generating about 0.02 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. SDAX Index
Performance |
| Timeline |
DAX Index and SDAX Index Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
SDAX Index
Pair trading matchups for SDAX Index
Pair Trading with DAX Index and SDAX Index
The main advantage of trading using opposite DAX Index and SDAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, SDAX Index 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 SDAX Index will offset losses from the drop in SDAX Index'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 |
| SDAX Index vs. Boyd Gaming | SDAX Index vs. Chunghwa Telecom Co | SDAX Index vs. ANGLER GAMING PLC | SDAX Index vs. TROPHY GAMES DEV |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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