Correlation Between Deutsche Telekom and Christian Dior
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Christian Dior 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 Christian Dior 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 Christian Dior SE, you can compare the effects of market volatilities on Deutsche Telekom and Christian Dior 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 Christian Dior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Christian Dior.
Diversification Opportunities for Deutsche Telekom and Christian Dior
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Christian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Christian Dior SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Christian Dior SE 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 Christian Dior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Christian Dior SE has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Christian Dior go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Christian Dior
Assuming the 90 days trading horizon Deutsche Telekom AG is expected to generate 0.57 times more return on investment than Christian Dior. However, Deutsche Telekom AG is 1.75 times less risky than Christian Dior. It trades about 0.1 of its potential returns per unit of risk. Christian Dior SE is currently generating about -0.02 per unit of risk. If you would invest 1,899 in Deutsche Telekom AG on October 14, 2024 and sell it today you would earn a total of 1,045 from holding Deutsche Telekom AG or generate 55.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Telekom AG vs. Christian Dior SE
Performance |
| Timeline |
| Deutsche Telekom |
| Christian Dior SE |
Deutsche Telekom and Christian Dior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Christian Dior
The main advantage of trading using opposite Deutsche Telekom and Christian Dior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Christian Dior 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 Christian Dior will offset losses from the drop in Christian Dior's long position.| Deutsche Telekom vs. BANKINTER ADR 2007 | Deutsche Telekom vs. The Hanover Insurance | Deutsche Telekom vs. GigaMedia | Deutsche Telekom vs. Townsquare Media |
| Christian Dior vs. Tencent Music Entertainment | Christian Dior vs. Globex Mining Enterprises | Christian Dior vs. RCS MediaGroup SpA | Christian Dior vs. MCEWEN MINING INC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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