Correlation Between Deutsche Post and Jaws Hurricane

Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Jaws Hurricane 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 Post and Jaws Hurricane into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deutsche Post AG and Jaws Hurricane Acquisition, you can compare the effects of market volatilities on Deutsche Post and Jaws Hurricane 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 Post with a short position of Jaws Hurricane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Jaws Hurricane.

Diversification Opportunities for Deutsche Post and Jaws Hurricane

-0.93

Correlation Coefficient

Deutsche Post  Jaws Hurricane

Pay attention - limited upside

The 3 months correlation between Deutsche and Jaws is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Jaws Hurricane Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jaws Hurricane Acqui and Deutsche Post 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 Post AG are associated (or correlated) with Jaws Hurricane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jaws Hurricane Acqui has no effect on the direction of Deutsche Post i.e., Deutsche Post and Jaws Hurricane go up and down completely randomly.

Pair Corralation between Deutsche Post and Jaws Hurricane

Assuming the 90 days horizon Deutsche Post AG is expected to generate 25.1 times more return on investment than Jaws Hurricane. However, Deutsche Post is 25.1 times more volatile than Jaws Hurricane Acquisition. It trades about 0.02 of its potential returns per unit of risk. Jaws Hurricane Acquisition is currently generating about 0.23 per unit of risk. If you would invest  3,418  in Deutsche Post AG on September 18, 2024 and sell it today you would earn a total of  213.00  from holding Deutsche Post AG or generate 6.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	25.27%
Values	Daily Returns

Deutsche Post AG  vs.  Jaws Hurricane Acquisition

Deutsche Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Post AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Jaws Hurricane Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jaws Hurricane Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jaws Hurricane is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Deutsche Post and Jaws Hurricane

The main advantage of trading using opposite Deutsche Post and Jaws Hurricane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Post position performs unexpectedly, Jaws Hurricane 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 Jaws Hurricane will offset losses from the drop in Jaws Hurricane's long position.

The idea behind Deutsche Post AG and Jaws Hurricane Acquisition 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.