Correlation Between DAX Index and Safran SA
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By analyzing existing cross correlation between DAX Index and Safran SA, you can compare the effects of market volatilities on DAX Index and Safran SA 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 Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Safran SA.
Diversification Opportunities for DAX Index and Safran SA
Poor diversification
The 3 months correlation between DAX and Safran is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA 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 Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of DAX Index i.e., DAX Index and Safran SA go up and down completely randomly.
Pair Corralation between DAX Index and Safran SA
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Safran SA. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 1.55 times less risky than Safran SA. The index trades about -0.05 of its potential returns per unit of risk. The Safran SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 21,160 in Safran SA on August 29, 2024 and sell it today you would earn a total of 560.00 from holding Safran SA or generate 2.65% 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. Safran SA
Performance |
| Timeline |
DAX Index and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Safran SA
Pair trading matchups for Safran SA
Pair Trading with DAX Index and Safran SA
The main advantage of trading using opposite DAX Index and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Safran SA 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 Safran SA will offset losses from the drop in Safran SA'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 |
| Safran SA vs. DXC Technology Co | Safran SA vs. FANDIFI TECHNOLOGY P | Safran SA vs. DOCDATA | Safran SA vs. Datang International Power |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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