Correlation Between Deutsche Bank and Technos SA

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

Diversification Opportunities for Deutsche Bank and Technos SA

0.28

Correlation Coefficient

Deutsche Bank  Technos SA

Modest diversification

The 3 months correlation between Deutsche and Technos is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Technos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technos SA 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 Technos SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technos SA has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Technos SA go up and down completely randomly.

Pair Corralation between Deutsche Bank and Technos SA

Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.63 times more return on investment than Technos SA. However, Deutsche Bank Aktiengesellschaft is 1.59 times less risky than Technos SA. It trades about 0.18 of its potential returns per unit of risk. Technos SA is currently generating about 0.01 per unit of risk. If you would invest  10,560  in Deutsche Bank Aktiengesellschaft on December 5, 2024 and sell it today you would earn a total of  2,011  from holding Deutsche Bank Aktiengesellschaft or generate 19.04% return on investment over 90 days.

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

Deutsche Bank Aktiengesellscha  vs.  Technos SA

Deutsche Bank Aktien

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Technos SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Technos SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Technos SA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Deutsche Bank and Technos SA

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

The idea behind Deutsche Bank Aktiengesellschaft and Technos SA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.