Correlation Between DAX Index and Sekisui Chemical
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By analyzing existing cross correlation between DAX Index and Sekisui Chemical Co, you can compare the effects of market volatilities on DAX Index and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Sekisui Chemical.
Diversification Opportunities for DAX Index and Sekisui Chemical
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Sekisui is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of DAX Index i.e., DAX Index and Sekisui Chemical go up and down completely randomly.
Pair Corralation between DAX Index and Sekisui Chemical
Assuming the 90 days trading horizon DAX Index is expected to generate 0.47 times more return on investment than Sekisui Chemical. However, DAX Index is 2.11 times less risky than Sekisui Chemical. It trades about 0.08 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.03 per unit of risk. If you would invest 1,598,996 in DAX Index on August 31, 2024 and sell it today you would earn a total of 363,649 from holding DAX Index or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Sekisui Chemical Co
Performance |
| Timeline |
DAX Index and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Sekisui Chemical Co
Pair trading matchups for Sekisui Chemical
Pair Trading with DAX Index and Sekisui Chemical
The main advantage of trading using opposite DAX Index and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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