Correlation Between Deutsche Post and Neometals
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Neometals 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 Neometals 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 Neometals, you can compare the effects of market volatilities on Deutsche Post and Neometals 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 Neometals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Neometals.
Diversification Opportunities for Deutsche Post and Neometals
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Neometals is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Neometals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neometals 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 Neometals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neometals has no effect on the direction of Deutsche Post i.e., Deutsche Post and Neometals go up and down completely randomly.
Pair Corralation between Deutsche Post and Neometals
Assuming the 90 days trading horizon Deutsche Post AG is expected to generate 0.26 times more return on investment than Neometals. However, Deutsche Post AG is 3.81 times less risky than Neometals. It trades about -0.01 of its potential returns per unit of risk. Neometals is currently generating about -0.03 per unit of risk. If you would invest 3,880 in Deutsche Post AG on November 28, 2024 and sell it today you would lose (150.00) from holding Deutsche Post AG or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.49% |
| Values | Daily Returns |
Deutsche Post AG vs. Neometals
Performance |
| Timeline |
| Deutsche Post AG |
| Neometals |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Deutsche Post and Neometals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Neometals
The main advantage of trading using opposite Deutsche Post and Neometals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Neometals 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 Neometals will offset losses from the drop in Neometals' long position.| Deutsche Post vs. Pan American Silver | Deutsche Post vs. Martin Marietta Materials | Deutsche Post vs. Morgan Advanced Materials | Deutsche Post vs. Beowulf Mining |
| Neometals vs. Spirent Communications plc | Neometals vs. Litigation Capital Management | Neometals vs. Science in Sport | Neometals vs. Cairo Communication SpA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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