Correlation Between DAX Index and CONTAGIOUS GAMING

Can any of the company-specific risk be diversified away by investing in both DAX Index and CONTAGIOUS GAMING 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 CONTAGIOUS GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for DAX Index and CONTAGIOUS GAMING

0.0

Correlation Coefficient

DAX Index  CONTAGIOUS GAMING

Pay attention - limited upside

The 3 months correlation between DAX and CONTAGIOUS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and CONTAGIOUS GAMING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONTAGIOUS GAMING INC 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 CONTAGIOUS GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONTAGIOUS GAMING INC has no effect on the direction of DAX Index i.e., DAX Index and CONTAGIOUS GAMING go up and down completely randomly.

Pair Corralation between DAX Index and CONTAGIOUS GAMING

If you would invest  1,906,647  in DAX Index on October 8, 2024 and sell it today you would earn a total of  114,972  from holding DAX Index or generate 6.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

DAX Index  vs.  CONTAGIOUS GAMING INC

Pair Trading with DAX Index and CONTAGIOUS GAMING

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

The idea behind DAX Index and CONTAGIOUS GAMING INC 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.