Correlation Between DAX Index and Valero Energy
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By analyzing existing cross correlation between DAX Index and Valero Energy, you can compare the effects of market volatilities on DAX Index and Valero Energy 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 Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Valero Energy.
Diversification Opportunities for DAX Index and Valero Energy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Valero is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy 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 Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of DAX Index i.e., DAX Index and Valero Energy go up and down completely randomly.
Pair Corralation between DAX Index and Valero Energy
Assuming the 90 days trading horizon DAX Index is expected to generate 0.39 times more return on investment than Valero Energy. However, DAX Index is 2.59 times less risky than Valero Energy. It trades about 0.07 of its potential returns per unit of risk. Valero Energy is currently generating about 0.01 per unit of risk. If you would invest 1,552,342 in DAX Index on October 1, 2024 and sell it today you would earn a total of 446,090 from holding DAX Index or generate 28.74% 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. Valero Energy
Performance |
| Timeline |
DAX Index and Valero Energy Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Valero Energy
Pair trading matchups for Valero Energy
Pair Trading with DAX Index and Valero Energy
The main advantage of trading using opposite DAX Index and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Valero Energy 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 Valero Energy will offset losses from the drop in Valero Energy's long position.| DAX Index vs. LION ONE METALS | DAX Index vs. NAKED WINES PLC | DAX Index vs. Consolidated Communications Holdings | DAX Index vs. CHINA TONTINE WINES |
| Valero Energy vs. Reliance Industries Limited | Valero Energy vs. Marathon Petroleum Corp | Valero Energy vs. NESTE OYJ UNSPADR | Valero Energy vs. Polski Koncern Naftowy |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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