Correlation Between Deutsche Telekom and MEDIAN TECHNOLOGIEEO

Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and MEDIAN TECHNOLOGIEEO 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 MEDIAN TECHNOLOGIEEO 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 MEDIAN TECHNOLOGIEEO 05, you can compare the effects of market volatilities on Deutsche Telekom and MEDIAN TECHNOLOGIEEO 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 MEDIAN TECHNOLOGIEEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and MEDIAN TECHNOLOGIEEO.

Diversification Opportunities for Deutsche Telekom and MEDIAN TECHNOLOGIEEO

-0.76

Correlation Coefficient

Deutsche Telekom  MEDIAN TECHNOLOGIEEO

Pay attention - limited upside

The 3 months correlation between Deutsche and MEDIAN is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and MEDIAN TECHNOLOGIEEO 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIAN TECHNOLOGIEEO 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 MEDIAN TECHNOLOGIEEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIAN TECHNOLOGIEEO has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and MEDIAN TECHNOLOGIEEO go up and down completely randomly.

Pair Corralation between Deutsche Telekom and MEDIAN TECHNOLOGIEEO

Assuming the 90 days trading horizon Deutsche Telekom is expected to generate 2.77 times less return on investment than MEDIAN TECHNOLOGIEEO. But when comparing it to its historical volatility, Deutsche Telekom AG is 6.01 times less risky than MEDIAN TECHNOLOGIEEO. It trades about 0.11 of its potential returns per unit of risk. MEDIAN TECHNOLOGIEEO 05 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  396.00  in MEDIAN TECHNOLOGIEEO 05 on October 6, 2024 and sell it today you would earn a total of  22.00  from holding MEDIAN TECHNOLOGIEEO 05 or generate 5.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Deutsche Telekom AG  vs.  MEDIAN TECHNOLOGIEEO 05

Deutsche Telekom

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Telekom AG are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Deutsche Telekom may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MEDIAN TECHNOLOGIEEO

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MEDIAN TECHNOLOGIEEO 05 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MEDIAN TECHNOLOGIEEO may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Deutsche Telekom and MEDIAN TECHNOLOGIEEO

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

The idea behind Deutsche Telekom AG and MEDIAN TECHNOLOGIEEO 05 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.