Correlation Between DAX Index and Cullen/Frost Bankers
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By analyzing existing cross correlation between DAX Index and CullenFrost Bankers, you can compare the effects of market volatilities on DAX Index and Cullen/Frost Bankers 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 Cullen/Frost Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Cullen/Frost Bankers.
Diversification Opportunities for DAX Index and Cullen/Frost Bankers
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DAX and Cullen/Frost is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and CullenFrost Bankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen/Frost Bankers 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 Cullen/Frost Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen/Frost Bankers has no effect on the direction of DAX Index i.e., DAX Index and Cullen/Frost Bankers go up and down completely randomly.
Pair Corralation between DAX Index and Cullen/Frost Bankers
Assuming the 90 days trading horizon DAX Index is expected to generate 0.69 times more return on investment than Cullen/Frost Bankers. However, DAX Index is 1.45 times less risky than Cullen/Frost Bankers. It trades about 0.16 of its potential returns per unit of risk. CullenFrost Bankers is currently generating about -0.15 per unit of risk. If you would invest 2,040,592 in DAX Index on December 13, 2024 and sell it today you would earn a total of 227,049 from holding DAX Index or generate 11.13% 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. CullenFrost Bankers
Performance |
Timeline |
DAX Index and Cullen/Frost Bankers Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
CullenFrost Bankers
Pair trading matchups for Cullen/Frost Bankers
Pair Trading with DAX Index and Cullen/Frost Bankers
The main advantage of trading using opposite DAX Index and Cullen/Frost Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Cullen/Frost Bankers 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 Cullen/Frost Bankers will offset losses from the drop in Cullen/Frost Bankers' long position.DAX Index vs. SALESFORCE INC CDR | ||
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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