Correlation Between DAX Index and Johnson Controls
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By analyzing existing cross correlation between DAX Index and Johnson Controls International, you can compare the effects of market volatilities on DAX Index and Johnson Controls 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 Johnson Controls. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Johnson Controls.
Diversification Opportunities for DAX Index and Johnson Controls
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Johnson is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Johnson Controls International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Controls Int 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 Johnson Controls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Controls Int has no effect on the direction of DAX Index i.e., DAX Index and Johnson Controls go up and down completely randomly.
Pair Corralation between DAX Index and Johnson Controls
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Johnson Controls. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 2.21 times less risky than Johnson Controls. The index trades about -0.05 of its potential returns per unit of risk. The Johnson Controls International is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 7,091 in Johnson Controls International on August 29, 2024 and sell it today you would earn a total of 909.00 from holding Johnson Controls International or generate 12.82% 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. Johnson Controls International
Performance |
| Timeline |
DAX Index and Johnson Controls Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Johnson Controls International
Pair trading matchups for Johnson Controls
Pair Trading with DAX Index and Johnson Controls
The main advantage of trading using opposite DAX Index and Johnson Controls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Johnson Controls 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 Johnson Controls will offset losses from the drop in Johnson Controls' 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 |
| Johnson Controls vs. China Railway Construction | Johnson Controls vs. Superior Plus Corp | Johnson Controls vs. NMI Holdings | Johnson Controls vs. Origin Agritech |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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