Correlation Between Deutsche Telekom and BROADPEAK
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and BROADPEAK 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 BROADPEAK 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 BROADPEAK SA EO, you can compare the effects of market volatilities on Deutsche Telekom and BROADPEAK 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 BROADPEAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and BROADPEAK.
Diversification Opportunities for Deutsche Telekom and BROADPEAK
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and BROADPEAK is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and BROADPEAK SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADPEAK SA EO 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 BROADPEAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADPEAK SA EO has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and BROADPEAK go up and down completely randomly.
Pair Corralation between Deutsche Telekom and BROADPEAK
Assuming the 90 days trading horizon Deutsche Telekom AG is expected to generate 0.9 times more return on investment than BROADPEAK. However, Deutsche Telekom AG is 1.11 times less risky than BROADPEAK. It trades about 0.17 of its potential returns per unit of risk. BROADPEAK SA EO is currently generating about -0.05 per unit of risk. If you would invest 2,889 in Deutsche Telekom AG on October 30, 2024 and sell it today you would earn a total of 92.00 from holding Deutsche Telekom AG or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Telekom AG vs. BROADPEAK SA EO
Performance |
| Timeline |
| Deutsche Telekom |
| BROADPEAK SA EO |
Deutsche Telekom and BROADPEAK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and BROADPEAK
The main advantage of trading using opposite Deutsche Telekom and BROADPEAK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, BROADPEAK 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 BROADPEAK will offset losses from the drop in BROADPEAK's long position.| Deutsche Telekom vs. KENEDIX OFFICE INV | Deutsche Telekom vs. Television Broadcasts Limited | Deutsche Telekom vs. CAIRN HOMES EO | Deutsche Telekom vs. Gold Road Resources |
| BROADPEAK vs. CHIBA BANK | BROADPEAK vs. Virtu Financial | BROADPEAK vs. Fevertree Drinks PLC | BROADPEAK vs. Synchrony Financial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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