Correlation Between DAX Index and Eurotech SpA
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By analyzing existing cross correlation between DAX Index and Eurotech SpA, you can compare the effects of market volatilities on DAX Index and Eurotech SpA 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 Eurotech SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Eurotech SpA.
Diversification Opportunities for DAX Index and Eurotech SpA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAX and Eurotech is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Eurotech SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurotech SpA 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 Eurotech SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurotech SpA has no effect on the direction of DAX Index i.e., DAX Index and Eurotech SpA go up and down completely randomly.
Pair Corralation between DAX Index and Eurotech SpA
Assuming the 90 days trading horizon DAX Index is expected to generate 0.22 times more return on investment than Eurotech SpA. However, DAX Index is 4.52 times less risky than Eurotech SpA. It trades about 0.05 of its potential returns per unit of risk. Eurotech SpA is currently generating about -0.17 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 16,839 from holding DAX Index or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
DAX Index vs. Eurotech SpA
Performance |
| Timeline |
DAX Index and Eurotech SpA Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Eurotech SpA
Pair trading matchups for Eurotech SpA
Pair Trading with DAX Index and Eurotech SpA
The main advantage of trading using opposite DAX Index and Eurotech SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Eurotech SpA 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 Eurotech SpA will offset losses from the drop in Eurotech SpA's long position.| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Taiwan Semiconductor Manufacturing | DAX Index vs. Broadcom | DAX Index vs. MagnaChip Semiconductor Corp |
| Eurotech SpA vs. 24SEVENOFFICE GROUP AB | Eurotech SpA vs. SINGAPORE AIRLINES | Eurotech SpA vs. SBA Communications Corp | Eurotech SpA vs. MAVEN WIRELESS SWEDEN |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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