Correlation Between STORE ELECTRONIC and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and Deutsche Telekom 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 STORE ELECTRONIC and Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and Deutsche Telekom AG, you can compare the effects of market volatilities on STORE ELECTRONIC and Deutsche Telekom 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 STORE ELECTRONIC with a short position of Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and Deutsche Telekom.
Diversification Opportunities for STORE ELECTRONIC and Deutsche Telekom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STORE and Deutsche is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and Deutsche Telekom go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and Deutsche Telekom
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to under-perform the Deutsche Telekom. In addition to that, STORE ELECTRONIC is 1.69 times more volatile than Deutsche Telekom AG. It trades about -0.04 of its total potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.32 per unit of volatility. If you would invest 2,918 in Deutsche Telekom AG on November 3, 2024 and sell it today you would earn a total of 303.00 from holding Deutsche Telekom AG or generate 10.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. Deutsche Telekom AG
Performance |
| Timeline |
| STORE ELECTRONIC |
| Deutsche Telekom |
STORE ELECTRONIC and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and Deutsche Telekom
The main advantage of trading using opposite STORE ELECTRONIC and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| STORE ELECTRONIC vs. IMAGIN MEDICAL INC | STORE ELECTRONIC vs. MeVis Medical Solutions | STORE ELECTRONIC vs. Magic Software Enterprises | STORE ELECTRONIC vs. Apollo Medical Holdings |
| Deutsche Telekom vs. KENEDIX OFFICE INV | Deutsche Telekom vs. OFFICE DEPOT | Deutsche Telekom vs. SIEM OFFSHORE NEW | Deutsche Telekom vs. Agilent Technologies |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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