Correlation Between Deutsche Post and China Teletech
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and China Teletech 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 China Teletech 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 China Teletech Holding, you can compare the effects of market volatilities on Deutsche Post and China Teletech 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 China Teletech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and China Teletech.
Diversification Opportunities for Deutsche Post and China Teletech
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and China is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and China Teletech Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Teletech Holding 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 China Teletech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Teletech Holding has no effect on the direction of Deutsche Post i.e., Deutsche Post and China Teletech go up and down completely randomly.
Pair Corralation between Deutsche Post and China Teletech
Assuming the 90 days horizon Deutsche Post AG is expected to under-perform the China Teletech. But the pink sheet apears to be less risky and, when comparing its historical volatility, Deutsche Post AG is 15.54 times less risky than China Teletech. The pink sheet trades about -0.18 of its potential returns per unit of risk. The China Teletech Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.22 in China Teletech Holding on September 4, 2024 and sell it today you would lose (0.13) from holding China Teletech Holding or give up 59.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Deutsche Post AG vs. China Teletech Holding
Performance |
| Timeline |
| Deutsche Post AG |
| China Teletech Holding |
Deutsche Post and China Teletech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and China Teletech
The main advantage of trading using opposite Deutsche Post and China Teletech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, China Teletech 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 China Teletech will offset losses from the drop in China Teletech's long position.| Deutsche Post vs. Kuehne Nagel International | Deutsche Post vs. Kuehne Nagel International | Deutsche Post vs. DSV Panalpina AS | Deutsche Post vs. DSV Panalpina AS |
| China Teletech vs. Manaris Corp | China Teletech vs. Green Planet Bio | China Teletech vs. Continental Beverage Brands | China Teletech vs. Opus Magnum Ameris |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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