Correlation Between Deutsche Bank and Deutsche Pfandbriefbank

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

Diversification Opportunities for Deutsche Bank and Deutsche Pfandbriefbank

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Deutsche and Deutsche is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Deutsche Pfandbriefbank go up and down completely randomly.

Pair Corralation between Deutsche Bank and Deutsche Pfandbriefbank

Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.71 times more return on investment than Deutsche Pfandbriefbank. However, Deutsche Bank Aktiengesellschaft is 1.42 times less risky than Deutsche Pfandbriefbank. It trades about 0.14 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about 0.01 per unit of risk. If you would invest  1,430  in Deutsche Bank Aktiengesellschaft on October 22, 2024 and sell it today you would earn a total of  422.00  from holding Deutsche Bank Aktiengesellschaft or generate 29.51% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Deutsche Bank Aktiengesellscha  vs.  Deutsche Pfandbriefbank AG

 Performance 
       Timeline  
Deutsche Bank Aktien 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, Deutsche Bank displayed solid returns over the last few months and may actually be approaching a breakup point.
Deutsche Pfandbriefbank 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Deutsche Pfandbriefbank AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Deutsche Pfandbriefbank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Deutsche Bank and Deutsche Pfandbriefbank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Deutsche Bank and Deutsche Pfandbriefbank

The main advantage of trading using opposite Deutsche Bank and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.
The idea behind Deutsche Bank Aktiengesellschaft and Deutsche Pfandbriefbank AG 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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