Correlation Between DAX Index and KGHM Polska
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By analyzing existing cross correlation between DAX Index and KGHM Polska Miedz, you can compare the effects of market volatilities on DAX Index and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and KGHM Polska.
Diversification Opportunities for DAX Index and KGHM Polska
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAX and KGHM is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of DAX Index i.e., DAX Index and KGHM Polska go up and down completely randomly.
Pair Corralation between DAX Index and KGHM Polska
Assuming the 90 days trading horizon DAX Index is expected to generate 0.29 times more return on investment than KGHM Polska. However, DAX Index is 3.49 times less risky than KGHM Polska. It trades about 0.1 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.14 per unit of risk. If you would invest 1,891,850 in DAX Index on September 25, 2024 and sell it today you would earn a total of 93,027 from holding DAX Index or generate 4.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. KGHM Polska Miedz
Performance |
Timeline |
DAX Index and KGHM Polska Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
KGHM Polska Miedz
Pair trading matchups for KGHM Polska
Pair Trading with DAX Index and KGHM Polska
The main advantage of trading using opposite DAX Index and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.DAX Index vs. Universal Display | DAX Index vs. Playtech plc | DAX Index vs. Columbia Sportswear | DAX Index vs. PLAYMATES TOYS |
KGHM Polska vs. BJs Wholesale Club | KGHM Polska vs. COMPUTERSHARE | KGHM Polska vs. INTERSHOP Communications Aktiengesellschaft | KGHM Polska vs. QURATE RETAIL INC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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