Correlation Between DAX Index and Deere
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By analyzing existing cross correlation between DAX Index and Deere Company, you can compare the effects of market volatilities on DAX Index and Deere 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 Deere. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Deere.
Diversification Opportunities for DAX Index and Deere
Poor diversification
The 3 months correlation between DAX and Deere is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Deere Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deere Company 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 Deere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deere Company has no effect on the direction of DAX Index i.e., DAX Index and Deere go up and down completely randomly.
Pair Corralation between DAX Index and Deere
Assuming the 90 days trading horizon DAX Index is expected to generate 0.64 times more return on investment than Deere. However, DAX Index is 1.56 times less risky than Deere. It trades about 0.36 of its potential returns per unit of risk. Deere Company is currently generating about 0.09 per unit of risk. If you would invest 2,142,824 in DAX Index on December 4, 2024 and sell it today you would earn a total of 171,878 from holding DAX Index or generate 8.02% 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. Deere Company
Performance |
Timeline |
DAX Index and Deere Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Deere Company
Pair trading matchups for Deere
Pair Trading with DAX Index and Deere
The main advantage of trading using opposite DAX Index and Deere positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Deere 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 Deere will offset losses from the drop in Deere's long position.DAX Index vs. Boston Beer Co | DAX Index vs. THAI BEVERAGE | DAX Index vs. SCANSOURCE | DAX Index vs. Strategic Education |
Deere vs. Retail Estates NV | Deere vs. OPKO HEALTH | Deere vs. RCI Hospitality Holdings | Deere vs. MPH Health Care |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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