Correlation Between DAX Index and Universal Health
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By analyzing existing cross correlation between DAX Index and Universal Health Services, you can compare the effects of market volatilities on DAX Index and Universal Health 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 Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Universal Health.
Diversification Opportunities for DAX Index and Universal Health
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and Universal is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of DAX Index i.e., DAX Index and Universal Health go up and down completely randomly.
Pair Corralation between DAX Index and Universal Health
Assuming the 90 days trading horizon DAX Index is expected to generate 1.89 times less return on investment than Universal Health. But when comparing it to its historical volatility, DAX Index is 1.85 times less risky than Universal Health. It trades about 0.05 of its potential returns per unit of risk. Universal Health Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 19,000 in Universal Health Services on August 31, 2024 and sell it today you would earn a total of 300.00 from holding Universal Health Services or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. Universal Health Services
Performance |
| Timeline |
DAX Index and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Universal Health Services
Pair trading matchups for Universal Health
Pair Trading with DAX Index and Universal Health
The main advantage of trading using opposite DAX Index and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| Universal Health vs. BANKINTER ADR 2007 | Universal Health vs. The Hanover Insurance | Universal Health vs. DATANG INTL POW | Universal Health vs. CDN IMPERIAL BANK |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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