Correlation Between SDAX Index and Dow Jones
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By analyzing existing cross correlation between SDAX Index and Dow Jones Industrial, you can compare the effects of market volatilities on SDAX Index and Dow Jones 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 SDAX Index with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of SDAX Index and Dow Jones.
Diversification Opportunities for SDAX Index and Dow Jones
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between SDAX and Dow is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SDAX Index and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and SDAX 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 SDAX Index are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of SDAX Index i.e., SDAX Index and Dow Jones go up and down completely randomly.
Pair Corralation between SDAX Index and Dow Jones
Assuming the 90 days trading horizon SDAX Index is expected to generate 5.14 times less return on investment than Dow Jones. In addition to that, SDAX Index is 1.09 times more volatile than Dow Jones Industrial. It trades about 0.07 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
SDAX Index vs. Dow Jones Industrial
Performance |
| Timeline |
SDAX Index and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
SDAX Index
Pair trading matchups for SDAX Index
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with SDAX Index and Dow Jones
The main advantage of trading using opposite SDAX Index and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SDAX Index position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| SDAX Index vs. National Retail Properties | SDAX Index vs. Canon Marketing Japan | SDAX Index vs. SERI INDUSTRIAL EO | SDAX Index vs. GREENX METALS LTD |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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