Correlation Between DAX Index and TELE2 B
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By analyzing existing cross correlation between DAX Index and TELE2 B , you can compare the effects of market volatilities on DAX Index and TELE2 B 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 TELE2 B. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and TELE2 B.
Diversification Opportunities for DAX Index and TELE2 B
Very weak diversification
The 3 months correlation between DAX and TELE2 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 B 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 TELE2 B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 B has no effect on the direction of DAX Index i.e., DAX Index and TELE2 B go up and down completely randomly.
Pair Corralation between DAX Index and TELE2 B
Assuming the 90 days trading horizon DAX Index is expected to generate 0.72 times more return on investment than TELE2 B. However, DAX Index is 1.39 times less risky than TELE2 B. It trades about 0.41 of its potential returns per unit of risk. TELE2 B is currently generating about 0.11 per unit of risk. If you would invest 1,918,919 in DAX Index on September 19, 2024 and sell it today you would earn a total of 105,718 from holding DAX Index or generate 5.51% 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. TELE2 B
Performance |
| Timeline |
DAX Index and TELE2 B Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
TELE2 B
Pair trading matchups for TELE2 B
Pair Trading with DAX Index and TELE2 B
The main advantage of trading using opposite DAX Index and TELE2 B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, TELE2 B 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 TELE2 B will offset losses from the drop in TELE2 B's long position.| DAX Index vs. Sekisui Chemical Co | DAX Index vs. United Internet AG | DAX Index vs. X FAB Silicon Foundries | DAX Index vs. TIANDE CHEMICAL |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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