Correlation Between DAX Index and LVMH Mot
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By analyzing existing cross correlation between DAX Index and LVMH Mot Hennessy, you can compare the effects of market volatilities on DAX Index and LVMH Mot 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 LVMH Mot. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and LVMH Mot.
Diversification Opportunities for DAX Index and LVMH Mot
Weak diversification
The 3 months correlation between DAX and LVMH is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and LVMH Mot Hennessy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH Mot Hennessy 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 LVMH Mot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH Mot Hennessy has no effect on the direction of DAX Index i.e., DAX Index and LVMH Mot go up and down completely randomly.
Pair Corralation between DAX Index and LVMH Mot
Assuming the 90 days trading horizon DAX Index is expected to generate 2.96 times less return on investment than LVMH Mot. But when comparing it to its historical volatility, DAX Index is 2.21 times less risky than LVMH Mot. It trades about 0.21 of its potential returns per unit of risk. LVMH Mot Hennessy is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 57,799 in LVMH Mot Hennessy on September 23, 2024 and sell it today you would earn a total of 5,071 from holding LVMH Mot Hennessy or generate 8.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. LVMH Mot Hennessy
Performance |
Timeline |
DAX Index and LVMH Mot Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
LVMH Mot Hennessy
Pair trading matchups for LVMH Mot
Pair Trading with DAX Index and LVMH Mot
The main advantage of trading using opposite DAX Index and LVMH Mot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, LVMH Mot 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 LVMH Mot will offset losses from the drop in LVMH Mot's long position.DAX Index vs. alstria office REIT AG | DAX Index vs. OFFICE DEPOT | DAX Index vs. CHINA EDUCATION GROUP | DAX Index vs. MAVEN WIRELESS SWEDEN |
LVMH Mot vs. Spirent Communications plc | LVMH Mot vs. Comba Telecom Systems | LVMH Mot vs. Ultra Clean Holdings | LVMH Mot vs. Citic Telecom International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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