Correlation Between Deutsche Boerse and Euronext
Can any of the company-specific risk be diversified away by investing in both Deutsche Boerse and Euronext 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 Deutsche Boerse and Euronext into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Boerse AG and Euronext NV, you can compare the effects of market volatilities on Deutsche Boerse and Euronext 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 Deutsche Boerse with a short position of Euronext. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Boerse and Euronext.
Diversification Opportunities for Deutsche Boerse and Euronext
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and Euronext is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Boerse AG and Euronext NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronext NV and Deutsche Boerse 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 Deutsche Boerse AG are associated (or correlated) with Euronext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronext NV has no effect on the direction of Deutsche Boerse i.e., Deutsche Boerse and Euronext go up and down completely randomly.
Pair Corralation between Deutsche Boerse and Euronext
Assuming the 90 days horizon Deutsche Boerse AG is expected to under-perform the Euronext. In addition to that, Deutsche Boerse is 2.91 times more volatile than Euronext NV. It trades about -0.08 of its total potential returns per unit of risk. Euronext NV is currently generating about 0.21 per unit of volatility. If you would invest 9,317 in Euronext NV on January 20, 2024 and sell it today you would earn a total of 103.00 from holding Euronext NV or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Boerse AG vs. Euronext NV
Performance |
| Timeline |
| Deutsche Boerse AG |
| Euronext NV |
Deutsche Boerse and Euronext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Boerse and Euronext
The main advantage of trading using opposite Deutsche Boerse and Euronext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Boerse position performs unexpectedly, Euronext 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 Euronext will offset losses from the drop in Euronext's long position.| Deutsche Boerse vs. MSCI Inc | Deutsche Boerse vs. Otc Markets Group | Deutsche Boerse vs. Dun Bradstreet Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |