Correlation Between Deutsche Bank and Marblegate Acquisition

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

Diversification Opportunities for Deutsche Bank and Marblegate Acquisition

0.74

Correlation Coefficient

Deutsche Bank  Marblegate Acquisition

Poor diversification

The 3 months correlation between Deutsche and Marblegate is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Marblegate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marblegate 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 Marblegate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marblegate Acquisition has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Marblegate Acquisition go up and down completely randomly.

Pair Corralation between Deutsche Bank and Marblegate Acquisition

Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 6.43 times less return on investment than Marblegate Acquisition. But when comparing it to its historical volatility, Deutsche Bank AG is 8.39 times less risky than Marblegate Acquisition. It trades about 0.38 of its potential returns per unit of risk. Marblegate Acquisition Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Marblegate Acquisition Corp on December 5, 2024 and sell it today you would earn a total of  3.60  from holding Marblegate Acquisition Corp or generate 102.86% return on investment over 90 days.

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

Deutsche Bank AG  vs.  Marblegate Acquisition Corp

Deutsche Bank AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 15 (%) 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.

Marblegate Acquisition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marblegate Acquisition Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Marblegate Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Bank and Marblegate Acquisition

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

The idea behind Deutsche Bank AG and Marblegate Acquisition Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.