Correlation Between Trade Desk and DAX Index
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By analyzing existing cross correlation between The Trade Desk and DAX Index, you can compare the effects of market volatilities on Trade Desk and DAX Index 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 Trade Desk with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and DAX Index.
Diversification Opportunities for Trade Desk and DAX Index
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trade and DAX is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and Trade Desk 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 The Trade Desk are associated (or correlated) with DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Trade Desk i.e., Trade Desk and DAX Index go up and down completely randomly.
Pair Corralation between Trade Desk and DAX Index
Assuming the 90 days trading horizon Trade Desk is expected to generate 1.54 times less return on investment than DAX Index. In addition to that, Trade Desk is 4.96 times more volatile than DAX Index. It trades about 0.07 of its total potential returns per unit of risk. DAX Index is currently generating about 0.5 per unit of volatility. If you would invest 1,903,364 in DAX Index on September 13, 2024 and sell it today you would earn a total of 136,552 from holding DAX Index or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Trade Desk vs. DAX Index
Performance |
| Timeline |
Trade Desk and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
The Trade Desk
Pair trading matchups for Trade Desk
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Trade Desk and DAX Index
The main advantage of trading using opposite Trade Desk and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.The idea behind The Trade Desk and DAX Index pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| DAX Index vs. Consolidated Communications Holdings | DAX Index vs. Spirent Communications plc | DAX Index vs. Gamma Communications plc | DAX Index vs. CITIC Telecom International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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