Correlation Between Aluminumof China and Deutsche Telekom

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Deutsche Telekom AG, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Deutsche Telekom.

Diversification Opportunities for Aluminumof China and Deutsche Telekom

-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Aluminumof and Deutsche is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Deutsche Telekom go up and down completely randomly.

Pair Corralation between Aluminumof China and Deutsche Telekom

Assuming the 90 days horizon Aluminum of is expected to under-perform the Deutsche Telekom. In addition to that, Aluminumof China is 3.51 times more volatile than Deutsche Telekom AG. It trades about -0.15 of its total potential returns per unit of risk. Deutsche Telekom AG is currently generating about -0.16 per unit of volatility. If you would invest  2,969  in Deutsche Telekom AG on October 11, 2024 and sell it today you would lose (60.00) from holding Deutsche Telekom AG or give up 2.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aluminum of  vs.  Deutsche Telekom AG

 Performance 
       Timeline  
Aluminumof China 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aluminum of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Deutsche Telekom 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Telekom AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Deutsche Telekom may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aluminumof China and Deutsche Telekom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aluminumof China and Deutsche Telekom

The main advantage of trading using opposite Aluminumof China and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.
The idea behind Aluminum of and Deutsche Telekom AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules