Correlation Between Deutsche Post and Eco Animal
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Eco Animal 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 Eco Animal 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 Eco Animal Health, you can compare the effects of market volatilities on Deutsche Post and Eco Animal 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 Eco Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Eco Animal.
Diversification Opportunities for Deutsche Post and Eco Animal
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Eco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Eco Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco Animal Health 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 Eco Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco Animal Health has no effect on the direction of Deutsche Post i.e., Deutsche Post and Eco Animal go up and down completely randomly.
Pair Corralation between Deutsche Post and Eco Animal
Assuming the 90 days trading horizon Deutsche Post AG is expected to generate 0.56 times more return on investment than Eco Animal. However, Deutsche Post AG is 1.78 times less risky than Eco Animal. It trades about 0.01 of its potential returns per unit of risk. Eco Animal Health is currently generating about -0.02 per unit of risk. If you would invest 3,523 in Deutsche Post AG on September 3, 2024 and sell it today you would lose (42.00) from holding Deutsche Post AG or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Deutsche Post AG vs. Eco Animal Health
Performance |
| Timeline |
| Deutsche Post AG |
| Eco Animal Health |
Deutsche Post and Eco Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Eco Animal
The main advantage of trading using opposite Deutsche Post and Eco Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Eco Animal 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 Eco Animal will offset losses from the drop in Eco Animal's long position.| Deutsche Post vs. Catalyst Media Group | Deutsche Post vs. CATLIN GROUP | Deutsche Post vs. Magnora ASA | Deutsche Post vs. RTW Venture Fund |
| Eco Animal vs. Walmart | Eco Animal vs. Volkswagen AG | Eco Animal vs. Deutsche Post AG | Eco Animal vs. United Parcel Service |
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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