Correlation Between Deutsche Post and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on Deutsche Post and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Alfa Financial.
Diversification Opportunities for Deutsche Post and Alfa Financial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Deutsche and Alfa is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Deutsche Post i.e., Deutsche Post and Alfa Financial go up and down completely randomly.
Pair Corralation between Deutsche Post and Alfa Financial
Assuming the 90 days trading horizon Deutsche Post AG is expected to generate 1.01 times more return on investment than Alfa Financial. However, Deutsche Post is 1.01 times more volatile than Alfa Financial Software. It trades about 0.09 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.08 per unit of risk. If you would invest 3,365 in Deutsche Post AG on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Deutsche Post AG or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. Alfa Financial Software
Performance |
| Timeline |
| Deutsche Post AG |
| Alfa Financial Software |
Deutsche Post and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Alfa Financial
The main advantage of trading using opposite Deutsche Post and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| Deutsche Post vs. Catalyst Media Group | Deutsche Post vs. Delta Air Lines | Deutsche Post vs. Fair Oaks Income | Deutsche Post vs. Ubisoft Entertainment |
| Alfa Financial vs. Verizon Communications | Alfa Financial vs. Fonix Mobile plc | Alfa Financial vs. Abingdon Health Plc | Alfa Financial vs. Induction Healthcare Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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