Correlation Between DAX Index and Swatch Group
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By analyzing existing cross correlation between DAX Index and The Swatch Group, you can compare the effects of market volatilities on DAX Index and Swatch Group 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 Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Swatch Group.
Diversification Opportunities for DAX Index and Swatch Group
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAX and Swatch is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group 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 Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group has no effect on the direction of DAX Index i.e., DAX Index and Swatch Group go up and down completely randomly.
Pair Corralation between DAX Index and Swatch Group
Assuming the 90 days trading horizon DAX Index is expected to generate 0.26 times more return on investment than Swatch Group. However, DAX Index is 3.92 times less risky than Swatch Group. It trades about 0.08 of its potential returns per unit of risk. The Swatch Group is currently generating about -0.06 per unit of risk. If you would invest 1,950,829 in DAX Index on October 14, 2024 and sell it today you would earn a total of 70,650 from holding DAX Index or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
DAX Index vs. The Swatch Group
Performance |
| Timeline |
DAX Index and Swatch Group Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
The Swatch Group
Pair trading matchups for Swatch Group
Pair Trading with DAX Index and Swatch Group
The main advantage of trading using opposite DAX Index and Swatch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Swatch Group 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 Swatch Group will offset losses from the drop in Swatch Group's long position.| DAX Index vs. The Japan Steel | DAX Index vs. Khiron Life Sciences | DAX Index vs. TRADELINK ELECTRON | DAX Index vs. Tradegate AG Wertpapierhandelsbank |
| Swatch Group vs. LVMH Mot Hennessy | Swatch Group vs. LVMH Mot Hennessy | Swatch Group vs. Christian Dior SE | Swatch Group vs. Compagnie Financire Richemont |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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