Correlation Between DAX Index and Tesla
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By analyzing existing cross correlation between DAX Index and Tesla Inc, you can compare the effects of market volatilities on DAX Index and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Tesla.
Diversification Opportunities for DAX Index and Tesla
Weak diversification
The 3 months correlation between DAX and Tesla is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of DAX Index i.e., DAX Index and Tesla go up and down completely randomly.
Pair Corralation between DAX Index and Tesla
Assuming the 90 days trading horizon DAX Index is expected to generate 14.99 times less return on investment than Tesla. But when comparing it to its historical volatility, DAX Index is 5.17 times less risky than Tesla. It trades about 0.13 of its potential returns per unit of risk. Tesla Inc is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 22,405 in Tesla Inc on September 3, 2024 and sell it today you would earn a total of 9,665 from holding Tesla Inc or generate 43.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Tesla Inc
Performance |
| Timeline |
DAX Index and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Tesla Inc
Pair trading matchups for Tesla
Pair Trading with DAX Index and Tesla
The main advantage of trading using opposite DAX Index and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla'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 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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