Correlation Between Carnegie Clean and Deutsche Bank

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

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

Diversification Opportunities for Carnegie Clean and Deutsche Bank

-0.43

Correlation Coefficient

Carnegie Clean  Deutsche Bank

Very good diversification

The 3 months correlation between Carnegie and Deutsche is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Carnegie Clean Energy and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien and Carnegie Clean 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 Carnegie Clean Energy 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 Aktien has no effect on the direction of Carnegie Clean i.e., Carnegie Clean and Deutsche Bank go up and down completely randomly.

Pair Corralation between Carnegie Clean and Deutsche Bank

Assuming the 90 days trading horizon Carnegie Clean Energy is expected to under-perform the Deutsche Bank. In addition to that, Carnegie Clean is 2.08 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about -0.02 of its total potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.19 per unit of volatility. If you would invest  1,664  in Deutsche Bank Aktiengesellschaft on December 30, 2024 and sell it today you would earn a total of  555.00  from holding Deutsche Bank Aktiengesellschaft or generate 33.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Carnegie Clean Energy  vs.  Deutsche Bank Aktiengesellscha

Carnegie Clean Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carnegie Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Deutsche Bank Aktien

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, Deutsche Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carnegie Clean and Deutsche Bank

The main advantage of trading using opposite Carnegie Clean and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnegie Clean 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.

The idea behind Carnegie Clean Energy and Deutsche Bank Aktiengesellschaft 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..