Correlation Between DAX Index and WuXi AppTec
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By analyzing existing cross correlation between DAX Index and WuXi AppTec Co, you can compare the effects of market volatilities on DAX Index and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and WuXi AppTec.
Diversification Opportunities for DAX Index and WuXi AppTec
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and WuXi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of DAX Index i.e., DAX Index and WuXi AppTec go up and down completely randomly.
Pair Corralation between DAX Index and WuXi AppTec
Assuming the 90 days trading horizon DAX Index is expected to generate 5.17 times less return on investment than WuXi AppTec. But when comparing it to its historical volatility, DAX Index is 7.61 times less risky than WuXi AppTec. It trades about 0.07 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 437.00 in WuXi AppTec Co on September 1, 2024 and sell it today you would earn a total of 118.00 from holding WuXi AppTec Co or generate 27.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.48% |
| Values | Daily Returns |
DAX Index vs. WuXi AppTec Co
Performance |
| Timeline |
DAX Index and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
WuXi AppTec Co
Pair trading matchups for WuXi AppTec
Pair Trading with DAX Index and WuXi AppTec
The main advantage of trading using opposite DAX Index and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| DAX Index vs. BE Semiconductor Industries | DAX Index vs. REGAL ASIAN INVESTMENTS | DAX Index vs. SEI INVESTMENTS | DAX Index vs. National Beverage Corp |
| WuXi AppTec vs. Danaher | WuXi AppTec vs. Danaher | WuXi AppTec vs. SIEMENS HEALTH ADR050 | WuXi AppTec vs. DexCom Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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