Correlation Between Deutsche Telekom and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Singapore Telecommunicatio 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 Singapore Telecommunicatio 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 Singapore Telecommunications Limited, you can compare the effects of market volatilities on Deutsche Telekom and Singapore Telecommunicatio 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 Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Singapore Telecommunicatio.
Diversification Opportunities for Deutsche Telekom and Singapore Telecommunicatio
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Singapore is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Singapore Telecommunicatio
Assuming the 90 days trading horizon Deutsche Telekom AG is expected to generate 0.53 times more return on investment than Singapore Telecommunicatio. However, Deutsche Telekom AG is 1.9 times less risky than Singapore Telecommunicatio. It trades about 0.27 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.06 per unit of risk. If you would invest 2,588 in Deutsche Telekom AG on September 2, 2024 and sell it today you would earn a total of 440.00 from holding Deutsche Telekom AG or generate 17.0% 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. Singapore Telecommunications L
Performance |
| Timeline |
| Deutsche Telekom |
| Singapore Telecommunicatio |
Deutsche Telekom and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Singapore Telecommunicatio
The main advantage of trading using opposite Deutsche Telekom and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio's long position.| Deutsche Telekom vs. REGAL ASIAN INVESTMENTS | Deutsche Telekom vs. VIVA WINE GROUP | Deutsche Telekom vs. New Residential Investment | Deutsche Telekom vs. ECHO INVESTMENT ZY |
| Singapore Telecommunicatio vs. LGI Homes | Singapore Telecommunicatio vs. DATAGROUP SE | Singapore Telecommunicatio vs. Science Applications International | Singapore Telecommunicatio vs. HomeToGo SE |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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