This module allows you to analyze existing cross correlation between IPC and DAX. You can compare the effects of market volatilities on IPC and DAX 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 IPC with a short position of DAX. See also your portfolio center. Please also check ongoing floating volatility patterns of IPC and DAX.
|Horizon||30 Days Login to change|
Predicted Return Density
IPC vs. DAX
Given the investment horizon of 30 days, IPC is expected to generate 2.36 times less return on investment than DAX. But when comparing it to its historical volatility, IPC is 1.34 times less risky than DAX. It trades about 0.01 of its potential returns per unit of risk. DAX is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,238,734 in DAX on September 13, 2019 and sell it today you would earn a total of 12,431 from holding DAX or generate 1.0% return on investment over 30 days.
Pair Corralation between IPC and DAX
|Time Period||3 Months [change]|
Diversification Opportunities for IPC and DAX
Overlapping area represents the amount of risk that can be diversified away by holding IPC and DAX in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DAX and IPC 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 IPC are associated (or correlated) with DAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX has no effect on the direction of IPC i.e. IPC and DAX go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.