Correlation Between Telefonica Brasil and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Telefonica Brasil and Deutsche Bank 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 Telefonica Brasil and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telefonica Brasil SA and Deutsche Bank AG, you can compare the effects of market volatilities on Telefonica Brasil and Deutsche Bank 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 Telefonica Brasil with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telefonica Brasil and Deutsche Bank.
Diversification Opportunities for Telefonica Brasil and Deutsche Bank
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Telefonica and Deutsche is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Telefonica Brasil SA and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG and Telefonica Brasil 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 Telefonica Brasil SA are associated (or correlated) with Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank AG has no effect on the direction of Telefonica Brasil i.e., Telefonica Brasil and Deutsche Bank go up and down completely randomly.
Pair Corralation between Telefonica Brasil and Deutsche Bank
Considering the 90-day investment horizon Telefonica Brasil SA is expected to under-perform the Deutsche Bank. But the stock apears to be less risky and, when comparing its historical volatility, Telefonica Brasil SA is 1.17 times less risky than Deutsche Bank. The stock trades about -0.18 of its potential returns per unit of risk. The Deutsche Bank AG is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,536 in Deutsche Bank AG on January 26, 2024 and sell it today you would earn a total of 112.00 from holding Deutsche Bank AG or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telefonica Brasil SA vs. Deutsche Bank AG
Performance |
| Timeline |
| Telefonica Brasil |
| Deutsche Bank AG |
Telefonica Brasil and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telefonica Brasil and Deutsche Bank
The main advantage of trading using opposite Telefonica Brasil and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telefonica Brasil position performs unexpectedly, Deutsche Bank 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 Bank will offset losses from the drop in Deutsche Bank's long position.| Telefonica Brasil vs. Orange SA ADR | Telefonica Brasil vs. Vodafone Group PLC | Telefonica Brasil vs. Grupo Televisa SAB | Telefonica Brasil vs. America Movil SAB |
| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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