Correlation Between Deutsche Post and Schiehallion

Can any of the company-specific risk be diversified away by investing in both Deutsche Post and Schiehallion 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 Post and Schiehallion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deutsche Post AG and Schiehallion, you can compare the effects of market volatilities on Deutsche Post and Schiehallion 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 Post with a short position of Schiehallion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Post and Schiehallion.

Diversification Opportunities for Deutsche Post and Schiehallion

-0.84

Correlation Coefficient

Deutsche Post  Schiehallion

Pay attention - limited upside

The 3 months correlation between Deutsche and Schiehallion is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Post AG and Schiehallion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schiehallion and Deutsche Post 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 Post AG are associated (or correlated) with Schiehallion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schiehallion has no effect on the direction of Deutsche Post i.e., Deutsche Post and Schiehallion go up and down completely randomly.

Pair Corralation between Deutsche Post and Schiehallion

Assuming the 90 days trading horizon Deutsche Post is expected to generate 11.7 times less return on investment than Schiehallion. But when comparing it to its historical volatility, Deutsche Post AG is 1.97 times less risky than Schiehallion. It trades about 0.0 of its potential returns per unit of risk. Schiehallion is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  95.00  in Schiehallion on September 28, 2024 and sell it today you would earn a total of  14.00  from holding Schiehallion or generate 14.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.81%
Values	Daily Returns

Deutsche Post AG  vs.  Schiehallion

Deutsche Post AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Post AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Schiehallion

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Schiehallion are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Schiehallion unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Post and Schiehallion

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

The idea behind Deutsche Post AG and Schiehallion 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.