Correlation Between DAX Index and CEZ A
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By analyzing existing cross correlation between DAX Index and CEZ a s, you can compare the effects of market volatilities on DAX Index and CEZ A 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 CEZ A. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and CEZ A.
Diversification Opportunities for DAX Index and CEZ A
Poor diversification
The 3 months correlation between DAX and CEZ is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and CEZ a s in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ a s 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 CEZ A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ a s has no effect on the direction of DAX Index i.e., DAX Index and CEZ A go up and down completely randomly.
Pair Corralation between DAX Index and CEZ A
Assuming the 90 days trading horizon DAX Index is expected to generate 1.44 times less return on investment than CEZ A. But when comparing it to its historical volatility, DAX Index is 1.25 times less risky than CEZ A. It trades about 0.19 of its potential returns per unit of risk. CEZ a s is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,736 in CEZ a s on December 28, 2024 and sell it today you would earn a total of 784.00 from holding CEZ a s or generate 20.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.41% |
Values | Daily Returns |
DAX Index vs. CEZ a s
Performance |
Timeline |
DAX Index and CEZ A Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
CEZ a s
Pair trading matchups for CEZ A
Pair Trading with DAX Index and CEZ A
The main advantage of trading using opposite DAX Index and CEZ A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, CEZ A 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 CEZ A will offset losses from the drop in CEZ A's long position.DAX Index vs. Cembra Money Bank | DAX Index vs. REGAL HOTEL INTL | DAX Index vs. COVIVIO HOTELS INH | DAX Index vs. Preferred Bank |
CEZ A vs. Major Drilling Group | CEZ A vs. RESMINING UNSPADR10 | CEZ A vs. Luckin Coffee | CEZ A vs. VARIOUS EATERIES LS |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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