Correlation Between DAX Index and WisdomTree
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By analyzing existing cross correlation between DAX Index and WisdomTree SP 500, you can compare the effects of market volatilities on DAX Index and WisdomTree 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 WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and WisdomTree.
Diversification Opportunities for DAX Index and WisdomTree
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAX and WisdomTree is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and WisdomTree SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SP 500 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 WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SP 500 has no effect on the direction of DAX Index i.e., DAX Index and WisdomTree go up and down completely randomly.
Pair Corralation between DAX Index and WisdomTree
Assuming the 90 days trading horizon DAX Index is expected to generate 0.36 times more return on investment than WisdomTree. However, DAX Index is 2.81 times less risky than WisdomTree. It trades about 0.23 of its potential returns per unit of risk. WisdomTree SP 500 is currently generating about -0.1 per unit of risk. If you would invest 2,034,596 in DAX Index on December 7, 2024 and sell it today you would earn a total of 307,352 from holding DAX Index or generate 15.11% 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. WisdomTree SP 500
Performance |
Timeline |
DAX Index and WisdomTree Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
WisdomTree SP 500
Pair trading matchups for WisdomTree
Pair Trading with DAX Index and WisdomTree
The main advantage of trading using opposite DAX Index and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.DAX Index vs. Sims Metal Management | DAX Index vs. Air Products and | DAX Index vs. CHEMICAL INDUSTRIES | DAX Index vs. Silicon Motion Technology |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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