Correlation Between DAX Index and Thyssenkrupp
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By analyzing existing cross correlation between DAX Index and thyssenkrupp AG, you can compare the effects of market volatilities on DAX Index and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Thyssenkrupp.
Diversification Opportunities for DAX Index and Thyssenkrupp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DAX and Thyssenkrupp is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of DAX Index i.e., DAX Index and Thyssenkrupp go up and down completely randomly.
Pair Corralation between DAX Index and Thyssenkrupp
Assuming the 90 days trading horizon DAX Index is expected to generate 7.89 times less return on investment than Thyssenkrupp. But when comparing it to its historical volatility, DAX Index is 3.85 times less risky than Thyssenkrupp. It trades about 0.13 of its potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 323.00 in thyssenkrupp AG on September 3, 2024 and sell it today you would earn a total of 67.00 from holding thyssenkrupp AG or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. thyssenkrupp AG
Performance |
| Timeline |
DAX Index and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
thyssenkrupp AG
Pair trading matchups for Thyssenkrupp
Pair Trading with DAX Index and Thyssenkrupp
The main advantage of trading using opposite DAX Index and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| DAX Index vs. SPORT LISBOA E | DAX Index vs. FUYO GENERAL LEASE | DAX Index vs. Live Nation Entertainment | DAX Index vs. Transport International Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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