Correlation Between DAX Index and Komercn Banka

Can any of the company-specific risk be diversified away by investing in both DAX Index and Komercn Banka at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DAX Index and Komercn Banka into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DAX Index and Komercn banka as, you can compare the effects of market volatilities on DAX Index and Komercn Banka 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 Komercn Banka. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Komercn Banka.

Diversification Opportunities for DAX Index and Komercn Banka

0.77

Correlation Coefficient

DAX Index  Komercn Banka

Poor diversification

The 3 months correlation between DAX and Komercn is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Komercn banka as in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komercn banka as 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 Komercn Banka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komercn banka as has no effect on the direction of DAX Index i.e., DAX Index and Komercn Banka go up and down completely randomly.

Pair Corralation between DAX Index and Komercn Banka

Assuming the 90 days trading horizon DAX Index is expected to generate 1.0 times less return on investment than Komercn Banka. But when comparing it to its historical volatility, DAX Index is 1.46 times less risky than Komercn Banka. It trades about 0.09 of its potential returns per unit of risk. Komercn banka as is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,066  in Komercn banka as on September 23, 2024 and sell it today you would earn a total of  272.00  from holding Komercn banka as or generate 8.87% 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.  Komercn banka as

Pair Trading with DAX Index and Komercn Banka

The main advantage of trading using opposite DAX Index and Komercn Banka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Komercn Banka 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 Komercn Banka will offset losses from the drop in Komercn Banka's long position.

The idea behind DAX Index and Komercn banka as pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.