Correlation Between Deutsche Telekom and Freshpet
Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom and Freshpet 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 Freshpet 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 Freshpet, you can compare the effects of market volatilities on Deutsche Telekom and Freshpet 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 Freshpet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Freshpet.
Diversification Opportunities for Deutsche Telekom and Freshpet
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Freshpet is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet 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 Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of Deutsche Telekom i.e., Deutsche Telekom and Freshpet go up and down completely randomly.
Pair Corralation between Deutsche Telekom and Freshpet
If you would invest 10,828 in Freshpet on December 29, 2023 and sell it today you would earn a total of 743.00 from holding Freshpet or generate 6.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Deutsche Telekom AG vs. Freshpet
Performance |
Timeline |
Deutsche Telekom |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Freshpet |
Deutsche Telekom and Freshpet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Deutsche Telekom and Freshpet
The main advantage of trading using opposite Deutsche Telekom and Freshpet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom position performs unexpectedly, Freshpet 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 Freshpet will offset losses from the drop in Freshpet's long position.Deutsche Telekom vs. OUTSOURCING INC | Deutsche Telekom vs. Compugroup Medical SE | Deutsche Telekom vs. EIDESVIK OFFSHORE NK | Deutsche Telekom vs. CVR Medical Corp |
Freshpet vs. Bunge Limited | Freshpet vs. Altria Group | Freshpet vs. Philip Morris International | Freshpet vs. Everest Consolidator Acquisition |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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