Correlation Between DAX Index and Essex Property
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By analyzing existing cross correlation between DAX Index and Essex Property Trust, you can compare the effects of market volatilities on DAX Index and Essex Property 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 Essex Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Essex Property.
Diversification Opportunities for DAX Index and Essex Property
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DAX and Essex is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Essex Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essex Property Trust 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 Essex Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essex Property Trust has no effect on the direction of DAX Index i.e., DAX Index and Essex Property go up and down completely randomly.
Pair Corralation between DAX Index and Essex Property
Assuming the 90 days trading horizon DAX Index is expected to generate 0.59 times more return on investment than Essex Property. However, DAX Index is 1.7 times less risky than Essex Property. It trades about 0.28 of its potential returns per unit of risk. Essex Property Trust is currently generating about 0.07 per unit of risk. If you would invest 2,023,214 in DAX Index on December 4, 2024 and sell it today you would earn a total of 291,488 from holding DAX Index or generate 14.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. Essex Property Trust
Performance |
Timeline |
DAX Index and Essex Property Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Essex Property Trust
Pair trading matchups for Essex Property
Pair Trading with DAX Index and Essex Property
The main advantage of trading using opposite DAX Index and Essex Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Essex Property 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 Essex Property will offset losses from the drop in Essex Property's long position.DAX Index vs. Boston Beer Co | DAX Index vs. THAI BEVERAGE | DAX Index vs. SCANSOURCE | DAX Index vs. Strategic Education |
Essex Property vs. Omega Healthcare Investors | Essex Property vs. STAG Industrial | Essex Property vs. Superior Plus Corp | Essex Property vs. Intel |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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