Correlation Between Deutsche Bank and Beneficient

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

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

Diversification Opportunities for Deutsche Bank and Beneficient

-0.93

Correlation Coefficient

Deutsche Bank  Beneficient

Pay attention - limited upside

The 3 months correlation between Deutsche and Beneficient is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Beneficient Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beneficient Class and Deutsche Bank 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 Bank AG are associated (or correlated) with Beneficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beneficient Class has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Beneficient go up and down completely randomly.

Pair Corralation between Deutsche Bank and Beneficient

Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.53 times more return on investment than Beneficient. However, Deutsche Bank AG is 1.88 times less risky than Beneficient. It trades about 0.22 of its potential returns per unit of risk. Beneficient Class A is currently generating about -0.25 per unit of risk. If you would invest  1,712  in Deutsche Bank AG on December 30, 2024 and sell it today you would earn a total of  684.00  from holding Deutsche Bank AG or generate 39.95% return on investment over 90 days.

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

Deutsche Bank AG  vs.  Beneficient Class A

Deutsche Bank AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Beneficient Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beneficient Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Deutsche Bank and Beneficient

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

The idea behind Deutsche Bank AG and Beneficient Class A 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.