Correlation Between DAX Index and Traton SE
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By analyzing existing cross correlation between DAX Index and Traton SE, you can compare the effects of market volatilities on DAX Index and Traton SE 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 Traton SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Traton SE.
Diversification Opportunities for DAX Index and Traton SE
Significant diversification
The 3 months correlation between DAX and Traton is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Traton SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traton SE 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 Traton SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traton SE has no effect on the direction of DAX Index i.e., DAX Index and Traton SE go up and down completely randomly.
Pair Corralation between DAX Index and Traton SE
Assuming the 90 days trading horizon DAX Index is expected to generate 0.34 times more return on investment than Traton SE. However, DAX Index is 2.94 times less risky than Traton SE. It trades about 0.1 of its potential returns per unit of risk. Traton SE is currently generating about -0.04 per unit of risk. If you would invest 1,899,663 in DAX Index on September 24, 2024 and sell it today you would earn a total of 88,812 from holding DAX Index or generate 4.68% 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. Traton SE
Performance |
Timeline |
DAX Index and Traton SE Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Traton SE
Pair trading matchups for Traton SE
Pair Trading with DAX Index and Traton SE
The main advantage of trading using opposite DAX Index and Traton SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Traton SE 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 Traton SE will offset losses from the drop in Traton SE's long position.DAX Index vs. Seven West Media | DAX Index vs. TERADATA | DAX Index vs. DICKER DATA LTD | DAX Index vs. Datang International Power |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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