Correlation Between Deutsche Bank and Blue Ocean

Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Blue Ocean 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 Blue Ocean 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 Blue Ocean Acquisition, you can compare the effects of market volatilities on Deutsche Bank and Blue Ocean 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 Blue Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Blue Ocean.

Diversification Opportunities for Deutsche Bank and Blue Ocean

0.0

Correlation Coefficient

Deutsche Bank  Blue Ocean

Pay attention - limited upside

The 3 months correlation between Deutsche and Blue is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Blue Ocean Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Ocean Acquisition 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 Blue Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Ocean Acquisition has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Blue Ocean go up and down completely randomly.

Pair Corralation between Deutsche Bank and Blue Ocean

If you would invest  1,718  in Deutsche Bank AG on December 27, 2024 and sell it today you would earn a total of  807.00  from holding Deutsche Bank AG or generate 46.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Deutsche Bank AG  vs.  Blue Ocean Acquisition

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 20 (%) 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.

Blue Ocean Acquisition

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Ocean Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Blue Ocean is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Deutsche Bank and Blue Ocean

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

The idea behind Deutsche Bank AG and Blue Ocean Acquisition 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.