Correlation Between Deutsche Bank and NordTelekom Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and NordTelekom Telecommunicatio 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 Bank and NordTelekom Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank AG and NordTelekom Telecommunications Service, you can compare the effects of market volatilities on Deutsche Bank and NordTelekom Telecommunicatio 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 Bank with a short position of NordTelekom Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and NordTelekom Telecommunicatio.
Diversification Opportunities for Deutsche Bank and NordTelekom Telecommunicatio
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and NordTelekom is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and NordTelekom Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NordTelekom Telecommunicatio and Deutsche Bank 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 Bank AG are associated (or correlated) with NordTelekom Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NordTelekom Telecommunicatio has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and NordTelekom Telecommunicatio go up and down completely randomly.
Pair Corralation between Deutsche Bank and NordTelekom Telecommunicatio
Assuming the 90 days trading horizon Deutsche Bank AG is expected to generate 0.44 times more return on investment than NordTelekom Telecommunicatio. However, Deutsche Bank AG is 2.26 times less risky than NordTelekom Telecommunicatio. It trades about 0.15 of its potential returns per unit of risk. NordTelekom Telecommunications Service is currently generating about 0.04 per unit of risk. If you would invest 365,716 in Deutsche Bank AG on September 12, 2024 and sell it today you would earn a total of 335,784 from holding Deutsche Bank AG or generate 91.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.66% |
| Values | Daily Returns |
Deutsche Bank AG vs. NordTelekom Telecommunications
Performance |
| Timeline |
| Deutsche Bank AG |
| NordTelekom Telecommunicatio |
Deutsche Bank and NordTelekom Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and NordTelekom Telecommunicatio
The main advantage of trading using opposite Deutsche Bank and NordTelekom Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, NordTelekom Telecommunicatio 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 NordTelekom Telecommunicatio will offset losses from the drop in NordTelekom Telecommunicatio's long position.| Deutsche Bank vs. OTP Bank Nyrt | Deutsche Bank vs. MOL Nyrt | Deutsche Bank vs. OPUS GLOBAL Nyrt | Deutsche Bank vs. ALTEO Energiaszolgaltato Nyrt |
| NordTelekom Telecommunicatio vs. OTP Bank Nyrt | NordTelekom Telecommunicatio vs. MOL Nyrt | NordTelekom Telecommunicatio vs. OPUS GLOBAL Nyrt | NordTelekom Telecommunicatio vs. ALTEO Energiaszolgaltato Nyrt |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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