Correlation Between DAX Index and China International
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By analyzing existing cross correlation between DAX Index and China International Marine, you can compare the effects of market volatilities on DAX Index and China International 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 China International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and China International.
Diversification Opportunities for DAX Index and China International
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and China is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and China International Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China International 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 China International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China International has no effect on the direction of DAX Index i.e., DAX Index and China International go up and down completely randomly.
Pair Corralation between DAX Index and China International
Assuming the 90 days trading horizon DAX Index is expected to generate 1.54 times less return on investment than China International. But when comparing it to its historical volatility, DAX Index is 5.33 times less risky than China International. It trades about 0.12 of its potential returns per unit of risk. China International Marine is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 52.00 in China International Marine on September 26, 2024 and sell it today you would earn a total of 10.00 from holding China International Marine or generate 19.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. China International Marine
Performance |
Timeline |
DAX Index and China International Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
China International Marine
Pair trading matchups for China International
Pair Trading with DAX Index and China International
The main advantage of trading using opposite DAX Index and China International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, China International 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 China International will offset losses from the drop in China International's long position.DAX Index vs. CODERE ONLINE LUX | DAX Index vs. CARSALESCOM | DAX Index vs. PACIFIC ONLINE | DAX Index vs. Focus Home Interactive |
China International vs. Allegheny Technologies Incorporated | China International vs. thyssenkrupp AG | China International vs. thyssenkrupp AG | China International vs. Mueller Industries |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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