Correlation Between DAX Index and Vanguard FTSE
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By analyzing existing cross correlation between DAX Index and Vanguard FTSE Developed, you can compare the effects of market volatilities on DAX Index and Vanguard FTSE 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 Vanguard FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Vanguard FTSE.
Diversification Opportunities for DAX Index and Vanguard FTSE
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Vanguard is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Vanguard FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard FTSE Developed 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 Vanguard FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard FTSE Developed has no effect on the direction of DAX Index i.e., DAX Index and Vanguard FTSE go up and down completely randomly.
Pair Corralation between DAX Index and Vanguard FTSE
Assuming the 90 days trading horizon DAX Index is expected to generate 1.08 times more return on investment than Vanguard FTSE. However, DAX Index is 1.08 times more volatile than Vanguard FTSE Developed. It trades about 0.06 of its potential returns per unit of risk. Vanguard FTSE Developed is currently generating about -0.02 per unit of risk. If you would invest 1,840,564 in DAX Index on September 2, 2024 and sell it today you would earn a total of 122,081 from holding DAX Index or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Vanguard FTSE Developed
Performance |
| Timeline |
DAX Index and Vanguard FTSE Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Vanguard FTSE Developed
Pair trading matchups for Vanguard FTSE
Pair Trading with DAX Index and Vanguard FTSE
The main advantage of trading using opposite DAX Index and Vanguard FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Vanguard FTSE 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 Vanguard FTSE will offset losses from the drop in Vanguard FTSE's long position.| DAX Index vs. FEMALE HEALTH | DAX Index vs. CDN IMPERIAL BANK | DAX Index vs. Webster Financial | DAX Index vs. Cardinal Health |
| Vanguard FTSE vs. Xtrackers Nikkei 225 | Vanguard FTSE vs. iShares VII PLC | Vanguard FTSE vs. NMI Holdings | Vanguard FTSE vs. SIVERS SEMICONDUCTORS AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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