Correlation Between Deutsche Bank and Swiftmerge Acquisition

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

Diversification Opportunities for Deutsche Bank and Swiftmerge Acquisition

-0.1

Correlation Coefficient

Deutsche Bank  Swiftmerge Acquisition

Good diversification

The 3 months correlation between Deutsche and Swiftmerge is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Swiftmerge Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiftmerge 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 Swiftmerge Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiftmerge Acquisition has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Swiftmerge Acquisition go up and down completely randomly.

Pair Corralation between Deutsche Bank and Swiftmerge Acquisition

Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.25 times more return on investment than Swiftmerge Acquisition. However, Deutsche Bank AG is 4.07 times less risky than Swiftmerge Acquisition. It trades about 0.1 of its potential returns per unit of risk. Swiftmerge Acquisition Corp is currently generating about -0.09 per unit of risk. If you would invest  1,710  in Deutsche Bank AG on September 19, 2024 and sell it today you would earn a total of  61.00  from holding Deutsche Bank AG or generate 3.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.91%
Values	Daily Returns

Deutsche Bank AG  vs.  Swiftmerge Acquisition Corp

Deutsche Bank AG

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Deutsche Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Swiftmerge Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiftmerge Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal 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.

Pair Trading with Deutsche Bank and Swiftmerge Acquisition

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

The idea behind Deutsche Bank AG and Swiftmerge 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.