Correlation Between DAX Index and BG Foods
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By analyzing existing cross correlation between DAX Index and BG Foods, you can compare the effects of market volatilities on DAX Index and BG Foods 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 BG Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and BG Foods.
Diversification Opportunities for DAX Index and BG Foods
Good diversification
The 3 months correlation between DAX and DHR is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and BG Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Foods 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 BG Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Foods has no effect on the direction of DAX Index i.e., DAX Index and BG Foods go up and down completely randomly.
Pair Corralation between DAX Index and BG Foods
Assuming the 90 days trading horizon DAX Index is expected to generate 3.13 times less return on investment than BG Foods. But when comparing it to its historical volatility, DAX Index is 4.47 times less risky than BG Foods. It trades about 0.35 of its potential returns per unit of risk. BG Foods is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 599.00 in BG Foods on September 21, 2024 and sell it today you would earn a total of 95.00 from holding BG Foods or generate 15.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. BG Foods
Performance |
Timeline |
DAX Index and BG Foods Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
BG Foods
Pair trading matchups for BG Foods
Pair Trading with DAX Index and BG Foods
The main advantage of trading using opposite DAX Index and BG Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, BG Foods 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 BG Foods will offset losses from the drop in BG Foods' long position.DAX Index vs. Southwest Airlines Co | DAX Index vs. DAIRY FARM INTL | DAX Index vs. AUST AGRICULTURAL | DAX Index vs. Singapore Airlines Limited |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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