Correlation Between DAX and ASOS PLC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both DAX and ASOS PLC 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 and ASOS PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAX and ASOS PLC LS, you can compare the effects of market volatilities on DAX and ASOS PLC 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 with a short position of ASOS PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX and ASOS PLC.

Diversification Opportunities for DAX and ASOS PLC

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between DAX and ASOS PLC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DAX and ASOS PLC LS 035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASOS PLC LS and DAX 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 are associated (or correlated) with ASOS PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASOS PLC LS has no effect on the direction of DAX i.e., DAX and ASOS PLC go up and down completely randomly.
    Optimize

Pair Corralation between DAX and ASOS PLC

If you would invest (100.00)  in ASOS PLC LS on July 6, 2022 and sell it today you would earn a total of  100.00  from holding ASOS PLC LS or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

DAX  vs.  ASOS PLC LS 035

 Performance (%) 
       Timeline  

DAX and ASOS PLC Volatility Contrast

   Predicted Return Density   
       Returns  

DAX

Pair trading matchups for DAX

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DAX as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DAX's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DAX's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DAX.

Pair Trading with DAX and ASOS PLC

The main advantage of trading using opposite DAX and ASOS PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX position performs unexpectedly, ASOS PLC 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 ASOS PLC will offset losses from the drop in ASOS PLC's long position.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against DAX as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. DAX's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, DAX's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to DAX.
The idea behind DAX and ASOS PLC LS 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.
ASOS PLC vs. GOFORE OYJ
ASOS PLC vs. LAGERCRANTZ GROUP SER
ASOS PLC vs. STAYBLE THERAPEUTICS AB
ASOS PLC vs. RETI S P
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Focused Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Go