Correlation Between DAX Index and Japan Post
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By analyzing existing cross correlation between DAX Index and Japan Post Bank, you can compare the effects of market volatilities on DAX Index and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Japan Post.
Diversification Opportunities for DAX Index and Japan Post
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Japan is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Japan Post Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Bank 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Bank has no effect on the direction of DAX Index i.e., DAX Index and Japan Post go up and down completely randomly.
Pair Corralation between DAX Index and Japan Post
Assuming the 90 days trading horizon DAX Index is expected to generate 0.33 times more return on investment than Japan Post. However, DAX Index is 2.99 times less risky than Japan Post. It trades about 0.18 of its potential returns per unit of risk. Japan Post Bank is currently generating about -0.02 per unit of risk. If you would invest 1,940,520 in DAX Index on September 24, 2024 and sell it today you would earn a total of 47,955 from holding DAX Index or generate 2.47% 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. Japan Post Bank
Performance |
Timeline |
DAX Index and Japan Post Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Japan Post Bank
Pair trading matchups for Japan Post
Pair Trading with DAX Index and Japan Post
The main advantage of trading using opposite DAX Index and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.DAX Index vs. Seven West Media | DAX Index vs. TERADATA | DAX Index vs. DICKER DATA LTD | DAX Index vs. Datang International Power |
Japan Post vs. China Merchants Bank | Japan Post vs. HDFC Bank Limited | Japan Post vs. ICICI Bank Limited | Japan Post vs. PT Bank Central |
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 Stocks Directory module to find actively traded stocks across global markets.
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