Correlation Between Taiwan Semiconductor and DAX Index
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By analyzing existing cross correlation between Taiwan Semiconductor Manufacturing and DAX Index, you can compare the effects of market volatilities on Taiwan Semiconductor 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 Taiwan Semiconductor with a short position of DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiwan Semiconductor and DAX Index.
Diversification Opportunities for Taiwan Semiconductor and DAX Index
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Taiwan and DAX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Taiwan Semiconductor Manufactu and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index and Taiwan Semiconductor 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 Taiwan Semiconductor Manufacturing 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 Taiwan Semiconductor i.e., Taiwan Semiconductor and DAX Index go up and down completely randomly.
Pair Corralation between Taiwan Semiconductor and DAX Index
Assuming the 90 days trading horizon Taiwan Semiconductor Manufacturing is expected to generate 2.72 times more return on investment than DAX Index. However, Taiwan Semiconductor is 2.72 times more volatile than DAX Index. It trades about 0.17 of its potential returns per unit of risk. DAX Index is currently generating about -0.01 per unit of risk. If you would invest 19,598 in Taiwan Semiconductor Manufacturing on August 31, 2025 and sell it today you would earn a total of 5,352 from holding Taiwan Semiconductor Manufacturing or generate 27.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiwan Semiconductor Manufactu vs. DAX Index
Performance |
| Timeline |
Taiwan Semiconductor and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Taiwan Semiconductor Manufacturing
Pair trading matchups for Taiwan Semiconductor
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Taiwan Semiconductor and DAX Index
The main advantage of trading using opposite Taiwan Semiconductor and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiwan Semiconductor 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.| Taiwan Semiconductor vs. NVIDIA | Taiwan Semiconductor vs. NVIDIA | Taiwan Semiconductor vs. Broadcom | Taiwan Semiconductor vs. Texas Instruments Incorporated |
| DAX Index vs. Aegean Airlines SA | DAX Index vs. BII Railway Transportation | DAX Index vs. American Airlines Group | DAX Index vs. Liberty Broadband |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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