Correlation Between Microsoft and DAX Index
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By analyzing existing cross correlation between Microsoft and DAX Index, you can compare the effects of market volatilities on Microsoft and DAX Index 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 Microsoft with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and DAX Index.
Diversification Opportunities for Microsoft and DAX Index
Average diversification
The 3 months correlation between Microsoft and DAX is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and Microsoft 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 Microsoft are associated (or correlated) with DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Microsoft i.e., Microsoft and DAX Index go up and down completely randomly.
Pair Corralation between Microsoft and DAX Index
Given the investment horizon of 90 days Microsoft is expected to generate 2.18 times less return on investment than DAX Index. In addition to that, Microsoft is 1.47 times more volatile than DAX Index. It trades about 0.01 of its total potential returns per unit of risk. DAX Index is currently generating about 0.05 per unit of volatility. If you would invest 1,849,679 in DAX Index on August 28, 2024 and sell it today you would earn a total of 90,841 from holding DAX Index or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Microsoft vs. DAX Index
Performance |
| Timeline |
Microsoft and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Microsoft
Pair trading matchups for Microsoft
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Microsoft and DAX Index
The main advantage of trading using opposite Microsoft and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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