Correlation Between Deutsche Telekom and Spacetalk
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Spacetalk 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 Telekom and Spacetalk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Telekom AG and Spacetalk, you can compare the effects of market volatilities on Deutsche Telekom and Spacetalk 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 Telekom with a short position of Spacetalk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Spacetalk.
Diversification Opportunities for Deutsche Telekom and Spacetalk
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Spacetalk is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Spacetalk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spacetalk and Deutsche Telekom 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 Telekom AG are associated (or correlated) with Spacetalk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spacetalk has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Spacetalk go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Spacetalk
Assuming the 90 days horizon Deutsche Telekom is expected to generate 1.13 times less return on investment than Spacetalk. But when comparing it to its historical volatility, Deutsche Telekom AG is 8.78 times less risky than Spacetalk. It trades about 0.15 of its potential returns per unit of risk. Spacetalk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Spacetalk on September 30, 2024 and sell it today you would lose (1.05) from holding Spacetalk or give up 10.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Telekom AG vs. Spacetalk
Performance |
| Timeline |
| Deutsche Telekom |
| Spacetalk |
Deutsche Telekom and Spacetalk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Spacetalk
The main advantage of trading using opposite Deutsche Telekom and Spacetalk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Spacetalk 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 Spacetalk will offset losses from the drop in Spacetalk's long position.| Deutsche Telekom vs. T Mobile | Deutsche Telekom vs. ATT Inc | Deutsche Telekom vs. Deutsche Telekom AG | Deutsche Telekom vs. Nippon Telegraph and |
| Spacetalk vs. T Mobile | Spacetalk vs. ATT Inc | Spacetalk vs. Deutsche Telekom AG | Spacetalk vs. Deutsche Telekom AG |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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