Correlation Between Deutsche Post and Phoenix Group
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Phoenix Group 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 Phoenix Group 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 Phoenix Group Holdings, you can compare the effects of market volatilities on Deutsche Post and Phoenix Group 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 Phoenix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Phoenix Group.
Diversification Opportunities for Deutsche Post and Phoenix Group
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Deutsche and Phoenix is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Phoenix Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Group Holdings 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 Phoenix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Group Holdings has no effect on the direction of Deutsche Post i.e., Deutsche Post and Phoenix Group go up and down completely randomly.
Pair Corralation between Deutsche Post and Phoenix Group
Assuming the 90 days trading horizon Deutsche Post AG is expected to under-perform the Phoenix Group. In addition to that, Deutsche Post is 1.24 times more volatile than Phoenix Group Holdings. It trades about -0.08 of its total potential returns per unit of risk. Phoenix Group Holdings is currently generating about -0.06 per unit of volatility. If you would invest 53,932 in Phoenix Group Holdings on August 28, 2024 and sell it today you would lose (2,582) from holding Phoenix Group Holdings or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Post AG vs. Phoenix Group Holdings
Performance |
| Timeline |
| Deutsche Post AG |
| Phoenix Group Holdings |
Deutsche Post and Phoenix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Phoenix Group
The main advantage of trading using opposite Deutsche Post and Phoenix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Phoenix Group 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 Phoenix Group will offset losses from the drop in Phoenix Group's long position.| Deutsche Post vs. United Internet AG | Deutsche Post vs. MTI Wireless Edge | Deutsche Post vs. Cairo Communication SpA | Deutsche Post vs. The Mercantile Investment |
| Phoenix Group vs. Wheaton Precious Metals | Phoenix Group vs. JD Sports Fashion | Phoenix Group vs. Endeavour Mining Corp | Phoenix Group vs. AMG Advanced Metallurgical |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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