Correlation Between Deutsche Telekom and PLDT
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and PLDT 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 PLDT 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 PLDT Inc, you can compare the effects of market volatilities on Deutsche Telekom and PLDT 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 PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and PLDT.
Diversification Opportunities for Deutsche Telekom and PLDT
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and PLDT is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and PLDT go up and down completely randomly.
Pair Corralation between Deutsche Telekom and PLDT
Assuming the 90 days trading horizon Deutsche Telekom AG is expected to generate 0.87 times more return on investment than PLDT. However, Deutsche Telekom AG is 1.15 times less risky than PLDT. It trades about 0.07 of its potential returns per unit of risk. PLDT Inc is currently generating about 0.0 per unit of risk. If you would invest 1,803 in Deutsche Telekom AG on September 3, 2024 and sell it today you would earn a total of 1,197 from holding Deutsche Telekom AG or generate 66.39% 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. PLDT Inc
Performance |
| Timeline |
| Deutsche Telekom |
| PLDT Inc |
Deutsche Telekom and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and PLDT
The main advantage of trading using opposite Deutsche Telekom and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, PLDT 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 PLDT will offset losses from the drop in PLDT's long position.| Deutsche Telekom vs. ADRIATIC METALS LS 013355 | Deutsche Telekom vs. ARDAGH METAL PACDL 0001 | Deutsche Telekom vs. United Natural Foods | Deutsche Telekom vs. Kaiser Aluminum |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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