Correlation Between DAX Index and China Mobile
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By analyzing existing cross correlation between DAX Index and China Life Insurance, you can compare the effects of market volatilities on DAX Index and China Mobile 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 China Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and China Mobile.
Diversification Opportunities for DAX Index and China Mobile
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance 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 China Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of DAX Index i.e., DAX Index and China Mobile go up and down completely randomly.
Pair Corralation between DAX Index and China Mobile
Assuming the 90 days trading horizon DAX Index is expected to generate 0.5 times more return on investment than China Mobile. However, DAX Index is 2.01 times less risky than China Mobile. It trades about 0.17 of its potential returns per unit of risk. China Life Insurance is currently generating about 0.03 per unit of risk. If you would invest 1,990,914 in DAX Index on December 29, 2024 and sell it today you would earn a total of 255,238 from holding DAX Index or generate 12.82% 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. China Life Insurance
Performance |
Timeline |
DAX Index and China Mobile Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
China Life Insurance
Pair trading matchups for China Mobile
Pair Trading with DAX Index and China Mobile
The main advantage of trading using opposite DAX Index and China Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, China Mobile 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 China Mobile will offset losses from the drop in China Mobile's long position.DAX Index vs. SIDETRADE EO 1 | DAX Index vs. National Retail Properties | DAX Index vs. TOMBADOR IRON LTD | DAX Index vs. CALTAGIRONE EDITORE |
China Mobile vs. STEEL DYNAMICS | China Mobile vs. ANGANG STEEL H | China Mobile vs. ScanSource | China Mobile vs. COREBRIDGE FINANCIAL 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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