Correlation Between DAX Index and WESTERN DIGITAL
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By analyzing existing cross correlation between DAX Index and WESTERN DIGITAL, you can compare the effects of market volatilities on DAX Index and WESTERN DIGITAL 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 WESTERN DIGITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and WESTERN DIGITAL.
Diversification Opportunities for DAX Index and WESTERN DIGITAL
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and WESTERN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and WESTERN DIGITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN DIGITAL 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 WESTERN DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN DIGITAL has no effect on the direction of DAX Index i.e., DAX Index and WESTERN DIGITAL go up and down completely randomly.
Pair Corralation between DAX Index and WESTERN DIGITAL
Assuming the 90 days trading horizon DAX Index is expected to generate 1.44 times less return on investment than WESTERN DIGITAL. But when comparing it to its historical volatility, DAX Index is 2.68 times less risky than WESTERN DIGITAL. It trades about 0.18 of its potential returns per unit of risk. WESTERN DIGITAL is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,780 in WESTERN DIGITAL on September 12, 2024 and sell it today you would earn a total of 751.00 from holding WESTERN DIGITAL or generate 12.99% 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. WESTERN DIGITAL
Performance |
| Timeline |
DAX Index and WESTERN DIGITAL Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
WESTERN DIGITAL
Pair trading matchups for WESTERN DIGITAL
Pair Trading with DAX Index and WESTERN DIGITAL
The main advantage of trading using opposite DAX Index and WESTERN DIGITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, WESTERN DIGITAL 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 WESTERN DIGITAL will offset losses from the drop in WESTERN DIGITAL's long position.| DAX Index vs. Arrow Electronics | DAX Index vs. CANON MARKETING JP | DAX Index vs. The Trade Desk | DAX Index vs. METHODE ELECTRONICS |
| WESTERN DIGITAL vs. Pembina Pipeline Corp | WESTERN DIGITAL vs. MOLSON RS BEVERAGE | WESTERN DIGITAL vs. AEON STORES | WESTERN DIGITAL vs. Retail Estates NV |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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