Correlation Between Deutsche Bank and AeroVironment

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and AeroVironment 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 AeroVironment 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 AeroVironment, you can compare the effects of market volatilities on Deutsche Bank and AeroVironment 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 AeroVironment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and AeroVironment.

Diversification Opportunities for Deutsche Bank and AeroVironment

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Deutsche and AeroVironment is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and AeroVironment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroVironment 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 AeroVironment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroVironment has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and AeroVironment go up and down completely randomly.

Pair Corralation between Deutsche Bank and AeroVironment

Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.34 times more return on investment than AeroVironment. However, Deutsche Bank Aktiengesellschaft is 2.93 times less risky than AeroVironment. It trades about 0.09 of its potential returns per unit of risk. AeroVironment is currently generating about -0.05 per unit of risk. If you would invest  1,581  in Deutsche Bank Aktiengesellschaft on October 8, 2024 and sell it today you would earn a total of  120.00  from holding Deutsche Bank Aktiengesellschaft or generate 7.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Deutsche Bank Aktiengesellscha  vs.  AeroVironment

 Performance 
       Timeline  
Deutsche Bank Aktien 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward-looking signals, Deutsche Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.
AeroVironment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days AeroVironment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Deutsche Bank and AeroVironment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Deutsche Bank and AeroVironment

The main advantage of trading using opposite Deutsche Bank and AeroVironment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, AeroVironment 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 AeroVironment will offset losses from the drop in AeroVironment's long position.
The idea behind Deutsche Bank Aktiengesellschaft and AeroVironment 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation