Correlation Between Deutsche Telekom and America Movil

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

Diversification Opportunities for Deutsche Telekom and America Movil

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Correlation Coefficient

Deutsche Telekom  America Movil

Pay attention - limited upside

The 3 months correlation between Deutsche and America is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and America Movil SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on America Movil SAB 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 America Movil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of America Movil SAB has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and America Movil go up and down completely randomly.

Pair Corralation between Deutsche Telekom and America Movil

Assuming the 90 days horizon Deutsche Telekom AG is expected to generate 0.79 times more return on investment than America Movil. However, Deutsche Telekom AG is 1.26 times less risky than America Movil. It trades about 0.07 of its potential returns per unit of risk. America Movil SAB is currently generating about -0.02 per unit of risk. If you would invest  1,950  in Deutsche Telekom AG on October 9, 2024 and sell it today you would earn a total of  243.00  from holding Deutsche Telekom AG or generate 12.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	28.18%
Values	Daily Returns

Deutsche Telekom AG  vs.  America Movil SAB

Deutsche Telekom

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Deutsche Telekom AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Deutsche Telekom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

America Movil SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days America Movil SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Deutsche Telekom and America Movil

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

The idea behind Deutsche Telekom AG and America Movil SAB 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.