Correlation Between DAX Index and Spirent Communications
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By analyzing existing cross correlation between DAX Index and Spirent Communications plc, you can compare the effects of market volatilities on DAX Index and Spirent Communications 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 Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Spirent Communications.
Diversification Opportunities for DAX Index and Spirent Communications
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAX and Spirent is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications 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 Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of DAX Index i.e., DAX Index and Spirent Communications go up and down completely randomly.
Pair Corralation between DAX Index and Spirent Communications
Assuming the 90 days trading horizon DAX Index is expected to generate 0.89 times more return on investment than Spirent Communications. However, DAX Index is 1.12 times less risky than Spirent Communications. It trades about 0.09 of its potential returns per unit of risk. Spirent Communications plc is currently generating about 0.05 per unit of risk. If you would invest 1,925,734 in DAX Index on August 31, 2024 and sell it today you would earn a total of 36,911 from holding DAX Index or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. Spirent Communications plc
Performance |
| Timeline |
DAX Index and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Spirent Communications plc
Pair trading matchups for Spirent Communications
Pair Trading with DAX Index and Spirent Communications
The main advantage of trading using opposite DAX Index and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| Spirent Communications vs. ATT Inc | Spirent Communications vs. Deutsche Telekom AG | Spirent Communications vs. Superior Plus Corp | Spirent Communications vs. NMI 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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