Correlation Between DAX Index and TT Electronics
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By analyzing existing cross correlation between DAX Index and TT Electronics PLC, you can compare the effects of market volatilities on DAX Index and TT Electronics 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 TT Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and TT Electronics.
Diversification Opportunities for DAX Index and TT Electronics
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and 7TT is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and TT Electronics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TT Electronics PLC 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 TT Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TT Electronics PLC has no effect on the direction of DAX Index i.e., DAX Index and TT Electronics go up and down completely randomly.
Pair Corralation between DAX Index and TT Electronics
Assuming the 90 days trading horizon DAX Index is expected to generate 6.81 times less return on investment than TT Electronics. But when comparing it to its historical volatility, DAX Index is 11.44 times less risky than TT Electronics. It trades about 0.45 of its potential returns per unit of risk. TT Electronics PLC is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 88.00 in TT Electronics PLC on September 15, 2024 and sell it today you would earn a total of 37.00 from holding TT Electronics PLC or generate 42.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. TT Electronics PLC
Performance |
| Timeline |
DAX Index and TT Electronics Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
TT Electronics PLC
Pair trading matchups for TT Electronics
Pair Trading with DAX Index and TT Electronics
The main advantage of trading using opposite DAX Index and TT Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, TT Electronics 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 TT Electronics will offset losses from the drop in TT Electronics' long position.| DAX Index vs. Flutter Entertainment PLC | DAX Index vs. LG Display Co | DAX Index vs. TOWNSQUARE MEDIA INC | DAX Index vs. Prosiebensat 1 Media |
| TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc |
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.
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