Correlation Between PARKEN Sport and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport and Deutsche Telekom 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 PARKEN Sport and Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and Deutsche Telekom AG, you can compare the effects of market volatilities on PARKEN Sport and Deutsche Telekom 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 PARKEN Sport with a short position of Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Deutsche Telekom.
Diversification Opportunities for PARKEN Sport and Deutsche Telekom
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PARKEN and Deutsche is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom and PARKEN Sport 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 PARKEN Sport Entertainment are associated (or correlated) with Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of PARKEN Sport i.e., PARKEN Sport and Deutsche Telekom go up and down completely randomly.
Pair Corralation between PARKEN Sport and Deutsche Telekom
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to under-perform the Deutsche Telekom. In addition to that, PARKEN Sport is 1.63 times more volatile than Deutsche Telekom AG. It trades about -0.01 of its total potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.42 per unit of volatility. If you would invest 2,777 in Deutsche Telekom AG on September 1, 2024 and sell it today you would earn a total of 238.00 from holding Deutsche Telekom AG or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Deutsche Telekom AG
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Deutsche Telekom |
PARKEN Sport and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Deutsche Telekom
The main advantage of trading using opposite PARKEN Sport and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| PARKEN Sport vs. Netflix | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings |
| Deutsche Telekom vs. COLUMBIA SPORTSWEAR | Deutsche Telekom vs. CeoTronics AG | Deutsche Telekom vs. Transportadora de Gas | Deutsche Telekom vs. PARKEN Sport Entertainment |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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