Correlation Between DAX Index and Northern Star
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By analyzing existing cross correlation between DAX Index and Northern Star Resources, you can compare the effects of market volatilities on DAX Index and Northern Star 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 Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Northern Star.
Diversification Opportunities for DAX Index and Northern Star
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Northern is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star Resources 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 Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of DAX Index i.e., DAX Index and Northern Star go up and down completely randomly.
Pair Corralation between DAX Index and Northern Star
Assuming the 90 days trading horizon DAX Index is expected to generate 0.53 times more return on investment than Northern Star. However, DAX Index is 1.9 times less risky than Northern Star. It trades about 0.17 of its potential returns per unit of risk. Northern Star Resources is currently generating about 0.03 per unit of risk. If you would invest 2,035,880 in DAX Index on December 5, 2024 and sell it today you would earn a total of 196,801 from holding DAX Index or generate 9.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.33% |
Values | Daily Returns |
DAX Index vs. Northern Star Resources
Performance |
Timeline |
DAX Index and Northern Star Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Northern Star Resources
Pair trading matchups for Northern Star
Pair Trading with DAX Index and Northern Star
The main advantage of trading using opposite DAX Index and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Northern Star 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 Northern Star will offset losses from the drop in Northern Star's long position.DAX Index vs. ZhongAn Online P | DAX Index vs. CODERE ONLINE LUX | DAX Index vs. Insurance Australia Group | DAX Index vs. Vienna Insurance Group |
Northern Star vs. Carnegie Clean Energy | Northern Star vs. Keck Seng Investments | Northern Star vs. Clean Harbors | Northern Star vs. REGAL ASIAN INVESTMENTS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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