Correlation Between Deutsche Bank and T Mobile

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

By analyzing existing cross correlation between Deutsche Bank Aktiengesellschaft and T Mobile, you can compare the effects of market volatilities on Deutsche Bank and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and T Mobile.

Diversification Opportunities for Deutsche Bank and T Mobile

0.72

Correlation Coefficient

Deutsche Bank  T Mobile

Poor diversification

The 3 months correlation between Deutsche and T1MU34 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 Aktiengesellschaft are associated (or correlated) with T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and T Mobile go up and down completely randomly.

Pair Corralation between Deutsche Bank and T Mobile

Assuming the 90 days trading horizon Deutsche Bank is expected to generate 1.21 times less return on investment than T Mobile. In addition to that, Deutsche Bank is 1.08 times more volatile than T Mobile. It trades about 0.19 of its total potential returns per unit of risk. T Mobile is currently generating about 0.25 per unit of volatility. If you would invest  56,637  in T Mobile on September 14, 2024 and sell it today you would earn a total of  13,713  from holding T Mobile or generate 24.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Deutsche Bank Aktiengesellscha  vs.  T Mobile

Deutsche Bank Aktien

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

T Mobile

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, T Mobile sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Bank and T Mobile

The main advantage of trading using opposite Deutsche Bank and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.

The idea behind Deutsche Bank Aktiengesellschaft and T Mobile 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.