Correlation Between Deutsche Post and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Premier Foods 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 Premier Foods 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 Premier Foods PLC, you can compare the effects of market volatilities on Deutsche Post and Premier Foods 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Premier Foods.
Diversification Opportunities for Deutsche Post and Premier Foods
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Premier is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods PLC 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Deutsche Post i.e., Deutsche Post and Premier Foods go up and down completely randomly.
Pair Corralation between Deutsche Post and Premier Foods
Assuming the 90 days trading horizon Deutsche Post is expected to generate 12.5 times less return on investment than Premier Foods. In addition to that, Deutsche Post is 1.04 times more volatile than Premier Foods PLC. It trades about 0.01 of its total potential returns per unit of risk. Premier Foods PLC is currently generating about 0.1 per unit of volatility. If you would invest 10,313 in Premier Foods PLC on August 26, 2024 and sell it today you would earn a total of 8,427 from holding Premier Foods PLC or generate 81.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. Premier Foods PLC
Performance |
| Timeline |
| Deutsche Post AG |
| Premier Foods PLC |
Deutsche Post and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Premier Foods
The main advantage of trading using opposite Deutsche Post and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Deutsche Post vs. Komercni Banka | Deutsche Post vs. Cincinnati Financial Corp | Deutsche Post vs. Bank of Ireland | Deutsche Post vs. JD Sports Fashion |
| Premier Foods vs. Walmart | Premier Foods vs. BYD Co | Premier Foods vs. Volkswagen AG Non Vtg | Premier Foods vs. Deutsche Post AG |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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