Correlation Between DAX Index and Visa
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By analyzing existing cross correlation between DAX Index and Visa Inc, you can compare the effects of market volatilities on DAX Index and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Visa.
Diversification Opportunities for DAX Index and Visa
Modest diversification
The 3 months correlation between DAX and Visa is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of DAX Index i.e., DAX Index and Visa go up and down completely randomly.
Pair Corralation between DAX Index and Visa
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Visa. In addition to that, DAX Index is 1.22 times more volatile than Visa Inc. It trades about -0.14 of its total potential returns per unit of risk. Visa Inc is currently generating about -0.08 per unit of volatility. If you would invest 25,620 in Visa Inc on February 3, 2024 and sell it today you would lose (305.00) from holding Visa Inc or give up 1.19% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
DAX Index vs. Visa Inc
Performance |
Timeline |
DAX Index and Visa Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
Visa Inc
Pair trading matchups for Visa
Pair Trading with DAX Index and Visa
The main advantage of trading using opposite DAX Index and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.DAX Index vs. Tower One Wireless | DAX Index vs. URBAN OUTFITTERS | DAX Index vs. Choice Hotels International |
Visa vs. Visa Inc | Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Discover Financial Services |
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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