Correlation Between DAX Index and MIRAIT ONE

Can any of the company-specific risk be diversified away by investing in both DAX Index and MIRAIT ONE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining DAX Index and MIRAIT ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DAX Index and MIRAIT ONE P, you can compare the effects of market volatilities on DAX Index and MIRAIT ONE 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 MIRAIT ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and MIRAIT ONE.

Diversification Opportunities for DAX Index and MIRAIT ONE

0.48

Correlation Coefficient

DAX Index  MIRAIT ONE

Very weak diversification

The 3 months correlation between DAX and MIRAIT is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and MIRAIT ONE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAIT ONE P 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 MIRAIT ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAIT ONE P has no effect on the direction of DAX Index i.e., DAX Index and MIRAIT ONE go up and down completely randomly.

Pair Corralation between DAX Index and MIRAIT ONE

If you would invest  2,326,901  in DAX Index on April 23, 2025 and sell it today you would earn a total of  103,879  from holding DAX Index or generate 4.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

DAX Index  vs.  MIRAIT ONE P

Pair Trading with DAX Index and MIRAIT ONE

The main advantage of trading using opposite DAX Index and MIRAIT ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, MIRAIT ONE 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 MIRAIT ONE will offset losses from the drop in MIRAIT ONE's long position.

The idea behind DAX Index and MIRAIT ONE P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..