Correlation Between Deutsche Post and Target Corp
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Target Corp 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 Deutsche Post and Target Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Post AG and Target Corp, you can compare the effects of market volatilities on Deutsche Post and Target Corp 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 Deutsche Post with a short position of Target Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Target Corp.
Diversification Opportunities for Deutsche Post and Target Corp
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and Target is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Target Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Corp and Deutsche Post 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 Deutsche Post AG are associated (or correlated) with Target Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Corp has no effect on the direction of Deutsche Post i.e., Deutsche Post and Target Corp go up and down completely randomly.
Pair Corralation between Deutsche Post and Target Corp
Assuming the 90 days trading horizon Deutsche Post AG is expected to generate 0.62 times more return on investment than Target Corp. However, Deutsche Post AG is 1.61 times less risky than Target Corp. It trades about 0.01 of its potential returns per unit of risk. Target Corp is currently generating about 0.0 per unit of risk. If you would invest 3,514 in Deutsche Post AG on August 26, 2024 and sell it today you would earn a total of 7.00 from holding Deutsche Post AG or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Deutsche Post AG vs. Target Corp
Performance |
| Timeline |
| Deutsche Post AG |
| Target Corp |
Deutsche Post and Target Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Target Corp
The main advantage of trading using opposite Deutsche Post and Target Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Target Corp 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 Target Corp will offset losses from the drop in Target Corp's long position.| Deutsche Post vs. Samsung Electronics Co | Deutsche Post vs. Samsung Electronics Co | Deutsche Post vs. Hyundai Motor | Deutsche Post vs. Toyota Motor Corp |
| Target Corp vs. Samsung Electronics Co | Target Corp vs. Samsung Electronics Co | Target Corp vs. Hyundai Motor | Target Corp vs. Toyota Motor Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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