Correlation Between DAX Index and Associated British
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By analyzing existing cross correlation between DAX Index and Associated British Foods, you can compare the effects of market volatilities on DAX Index and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Associated British.
Diversification Opportunities for DAX Index and Associated British
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Associated is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of DAX Index i.e., DAX Index and Associated British go up and down completely randomly.
Pair Corralation between DAX Index and Associated British
Assuming the 90 days trading horizon DAX Index is expected to generate 0.53 times more return on investment than Associated British. However, DAX Index is 1.89 times less risky than Associated British. It trades about 0.18 of its potential returns per unit of risk. Associated British Foods is currently generating about 0.02 per unit of risk. If you would invest 1,863,311 in DAX Index on September 15, 2024 and sell it today you would earn a total of 177,281 from holding DAX Index or generate 9.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. Associated British Foods
Performance |
Timeline |
DAX Index and Associated British Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Associated British Foods
Pair trading matchups for Associated British
Pair Trading with DAX Index and Associated British
The main advantage of trading using opposite DAX Index and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.DAX Index vs. Flutter Entertainment PLC | DAX Index vs. LG Display Co | DAX Index vs. TOWNSQUARE MEDIA INC | DAX Index vs. Prosiebensat 1 Media |
Associated British vs. GREENX METALS LTD | Associated British vs. LION ONE METALS | Associated British vs. GALENA MINING LTD | Associated British vs. KENNAMETAL 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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