Correlation Between DAX Index and Choice Hotels
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By analyzing existing cross correlation between DAX Index and Choice Hotels International, you can compare the effects of market volatilities on DAX Index and Choice Hotels 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 Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Choice Hotels.
Diversification Opportunities for DAX Index and Choice Hotels
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Choice is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern 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 Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of DAX Index i.e., DAX Index and Choice Hotels go up and down completely randomly.
Pair Corralation between DAX Index and Choice Hotels
Assuming the 90 days trading horizon DAX Index is expected to generate 0.51 times more return on investment than Choice Hotels. However, DAX Index is 1.98 times less risky than Choice Hotels. It trades about 0.28 of its potential returns per unit of risk. Choice Hotels International is currently generating about -0.04 per unit of risk. If you would invest 1,993,362 in DAX Index on December 1, 2024 and sell it today you would earn a total of 261,781 from holding DAX Index or generate 13.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. Choice Hotels International
Performance |
Timeline |
DAX Index and Choice Hotels Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Choice Hotels International
Pair trading matchups for Choice Hotels
Pair Trading with DAX Index and Choice Hotels
The main advantage of trading using opposite DAX Index and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.DAX Index vs. Phibro Animal Health | DAX Index vs. Cardinal Health | DAX Index vs. Siemens Healthineers AG | DAX Index vs. CARDINAL HEALTH |
Choice Hotels vs. KENEDIX OFFICE INV | Choice Hotels vs. Compugroup Medical SE | Choice Hotels vs. Inspire Medical Systems | Choice Hotels vs. CREO MEDICAL GRP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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