Correlation Between Xinhua Winshare and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both Xinhua Winshare 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 Xinhua Winshare and Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xinhua Winshare Publishing and Deutsche Telekom AG, you can compare the effects of market volatilities on Xinhua Winshare 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 Xinhua Winshare with a short position of Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinhua Winshare and Deutsche Telekom.
Diversification Opportunities for Xinhua Winshare and Deutsche Telekom
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinhua and Deutsche is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Xinhua Winshare Publishing and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom and Xinhua Winshare 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 Xinhua Winshare Publishing 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 Xinhua Winshare i.e., Xinhua Winshare and Deutsche Telekom go up and down completely randomly.
Pair Corralation between Xinhua Winshare and Deutsche Telekom
Assuming the 90 days horizon Xinhua Winshare Publishing is expected to generate 4.38 times more return on investment than Deutsche Telekom. However, Xinhua Winshare is 4.38 times more volatile than Deutsche Telekom AG. It trades about 0.12 of its potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.13 per unit of risk. If you would invest 26.00 in Xinhua Winshare Publishing on October 19, 2024 and sell it today you would earn a total of 101.00 from holding Xinhua Winshare Publishing or generate 388.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinhua Winshare Publishing vs. Deutsche Telekom AG
Performance |
| Timeline |
| Xinhua Winshare Publ |
| Deutsche Telekom |
Xinhua Winshare and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinhua Winshare and Deutsche Telekom
The main advantage of trading using opposite Xinhua Winshare and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinhua Winshare 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.| Xinhua Winshare vs. United Rentals | Xinhua Winshare vs. UNITED RENTALS | Xinhua Winshare vs. MOVIE GAMES SA | Xinhua Winshare vs. FIRST SHIP LEASE |
| Deutsche Telekom vs. IMAGIN MEDICAL INC | Deutsche Telekom vs. Xinhua Winshare Publishing | Deutsche Telekom vs. IDP EDUCATION LTD | Deutsche Telekom vs. TAL Education Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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