Correlation Between Deutsche Telekom and Turk Telekomunikasyon
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Turk Telekomunikasyon 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 Turk Telekomunikasyon 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 Turk Telekomunikasyon AS, you can compare the effects of market volatilities on Deutsche Telekom and Turk Telekomunikasyon 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 Turk Telekomunikasyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Turk Telekomunikasyon.
Diversification Opportunities for Deutsche Telekom and Turk Telekomunikasyon
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Turk is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Turk Telekomunikasyon AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turk Telekomunikasyon 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 Turk Telekomunikasyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turk Telekomunikasyon has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Turk Telekomunikasyon go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Turk Telekomunikasyon
Assuming the 90 days horizon Deutsche Telekom AG is expected to generate 0.61 times more return on investment than Turk Telekomunikasyon. However, Deutsche Telekom AG is 1.64 times less risky than Turk Telekomunikasyon. It trades about 0.11 of its potential returns per unit of risk. Turk Telekomunikasyon AS is currently generating about 0.03 per unit of risk. If you would invest 2,308 in Deutsche Telekom AG on September 3, 2024 and sell it today you would earn a total of 904.00 from holding Deutsche Telekom AG or generate 39.17% 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. Turk Telekomunikasyon AS
Performance |
| Timeline |
| Deutsche Telekom |
| Turk Telekomunikasyon |
Deutsche Telekom and Turk Telekomunikasyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Telekom and Turk Telekomunikasyon
The main advantage of trading using opposite Deutsche Telekom and Turk Telekomunikasyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Turk Telekomunikasyon 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 Turk Telekomunikasyon will offset losses from the drop in Turk Telekomunikasyon's long position.| Deutsche Telekom vs. KT Corporation | Deutsche Telekom vs. Telkom Indonesia Tbk | Deutsche Telekom vs. SK Telecom Co | Deutsche Telekom vs. PLDT Inc ADR |
| Turk Telekomunikasyon vs. Verizon Communications | Turk Telekomunikasyon vs. ATT Inc | Turk Telekomunikasyon vs. Comcast Corp | Turk Telekomunikasyon 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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