Correlation Between Deutsche Post and Jumbo SA
Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Jumbo SA 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 Jumbo SA 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 Jumbo SA ADR, you can compare the effects of market volatilities on Deutsche Post and Jumbo SA 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 Jumbo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Jumbo SA.
Diversification Opportunities for Deutsche Post and Jumbo SA
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Jumbo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Jumbo SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumbo SA ADR 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 Jumbo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumbo SA ADR has no effect on the direction of Deutsche Post i.e., Deutsche Post and Jumbo SA go up and down completely randomly.
Pair Corralation between Deutsche Post and Jumbo SA
Assuming the 90 days horizon Deutsche Post AG is expected to under-perform the Jumbo SA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Deutsche Post AG is 2.56 times less risky than Jumbo SA. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Jumbo SA ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,676 in Jumbo SA ADR on November 5, 2024 and sell it today you would earn a total of 464.00 from holding Jumbo SA ADR or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 86.64% |
| Values | Daily Returns |
Deutsche Post AG vs. Jumbo SA ADR
Performance |
| Timeline |
| Deutsche Post AG |
| Jumbo SA ADR |
Deutsche Post and Jumbo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Post and Jumbo SA
The main advantage of trading using opposite Deutsche Post and Jumbo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Jumbo SA 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 Jumbo SA will offset losses from the drop in Jumbo SA'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 |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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