Correlation Between United Natural and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and Deutsche Telekom AG, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Deutsche Telekom.
Diversification Opportunities for United Natural and Deutsche Telekom
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Deutsche is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom and United Natural 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 United Natural Foods 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 United Natural i.e., United Natural and Deutsche Telekom go up and down completely randomly.
Pair Corralation between United Natural and Deutsche Telekom
Assuming the 90 days horizon United Natural is expected to generate 928.67 times less return on investment than Deutsche Telekom. In addition to that, United Natural is 2.24 times more volatile than Deutsche Telekom AG. It trades about 0.0 of its total potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.19 per unit of volatility. If you would invest 2,884 in Deutsche Telekom AG on December 29, 2024 and sell it today you would earn a total of 530.00 from holding Deutsche Telekom AG or generate 18.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Natural Foods vs. Deutsche Telekom AG
Performance |
Timeline |
United Natural Foods |
Deutsche Telekom |
United Natural and Deutsche Telekom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Natural and Deutsche Telekom
The main advantage of trading using opposite United Natural and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.United Natural vs. G8 EDUCATION | United Natural vs. CITY OFFICE REIT | United Natural vs. bet at home AG | United Natural vs. American Public Education |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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