Correlation Between DAX Index and China Southern
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By analyzing existing cross correlation between DAX Index and China Southern Airlines, you can compare the effects of market volatilities on DAX Index and China Southern 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 Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and China Southern.
Diversification Opportunities for DAX Index and China Southern
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and China is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines 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 Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of DAX Index i.e., DAX Index and China Southern go up and down completely randomly.
Pair Corralation between DAX Index and China Southern
Assuming the 90 days trading horizon DAX Index is expected to generate 0.31 times more return on investment than China Southern. However, DAX Index is 3.24 times less risky than China Southern. It trades about 0.2 of its potential returns per unit of risk. China Southern Airlines is currently generating about 0.03 per unit of risk. If you would invest 2,196,197 in DAX Index on April 23, 2025 and sell it today you would earn a total of 234,583 from holding DAX Index or generate 10.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
DAX Index vs. China Southern Airlines
Performance |
Timeline |
DAX Index and China Southern Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
China Southern Airlines
Pair trading matchups for China Southern
Pair Trading with DAX Index and China Southern
The main advantage of trading using opposite DAX Index and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, China Southern 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 Southern will offset losses from the drop in China Southern's long position.DAX Index vs. EBRO FOODS | DAX Index vs. Cal Maine Foods | DAX Index vs. Thai Beverage Public | DAX Index vs. Maple Leaf Foods |
China Southern vs. Delta Air Lines | China Southern vs. Air China Limited | China Southern vs. AIR CHINA LTD | China Southern vs. RYANAIR HLDGS ADR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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