Correlation Between Dr Martens and TT Electronics
Can any of the company-specific risk be diversified away by investing in both Dr Martens and TT Electronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dr Martens and TT Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dr Martens PLC and TT Electronics Plc, you can compare the effects of market volatilities on Dr Martens and TT Electronics 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 Dr Martens with a short position of TT Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dr Martens and TT Electronics.
Diversification Opportunities for Dr Martens and TT Electronics
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DOCS and TTG is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dr Martens PLC and TT Electronics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TT Electronics Plc and Dr Martens 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 Dr Martens PLC are associated (or correlated) with TT Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TT Electronics Plc has no effect on the direction of Dr Martens i.e., Dr Martens and TT Electronics go up and down completely randomly.
Pair Corralation between Dr Martens and TT Electronics
Assuming the 90 days trading horizon Dr Martens PLC is expected to under-perform the TT Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Dr Martens PLC is 3.91 times less risky than TT Electronics. The stock trades about -0.11 of its potential returns per unit of risk. The TT Electronics Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,800 in TT Electronics Plc on September 1, 2025 and sell it today you would earn a total of 3,560 from holding TT Electronics Plc or generate 36.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dr Martens PLC vs. TT Electronics Plc
Performance |
| Timeline |
| Dr Martens PLC |
| TT Electronics Plc |
Dr Martens and TT Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dr Martens and TT Electronics
The main advantage of trading using opposite Dr Martens and TT Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dr Martens position performs unexpectedly, TT Electronics 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 TT Electronics will offset losses from the drop in TT Electronics' long position.| Dr Martens vs. Liontrust Asset Management | Dr Martens vs. Delta Air Lines | Dr Martens vs. Fair Oaks Income | Dr Martens vs. Wyndham Hotels Resorts |
| TT Electronics vs. Toyota Motor Corp | TT Electronics vs. SoftBank Group Corp | TT Electronics vs. Cheniere Energy | TT Electronics vs. IDEXX Laboratories |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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