Correlation Between Deutsche Bank and Fibra Mty

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

Diversification Opportunities for Deutsche Bank and Fibra Mty

-0.06

Correlation Coefficient

Deutsche Bank  Fibra Mty

Good diversification

The 3 months correlation between Deutsche and Fibra is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Fibra Mty SAPI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fibra Mty SAPI 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 Fibra Mty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fibra Mty SAPI has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Fibra Mty go up and down completely randomly.

Pair Corralation between Deutsche Bank and Fibra Mty

Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 2.35 times more return on investment than Fibra Mty. However, Deutsche Bank is 2.35 times more volatile than Fibra Mty SAPI. It trades about 0.07 of its potential returns per unit of risk. Fibra Mty SAPI is currently generating about 0.01 per unit of risk. If you would invest  23,400  in Deutsche Bank Aktiengesellschaft on October 26, 2024 and sell it today you would earn a total of  16,600  from holding Deutsche Bank Aktiengesellschaft or generate 70.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.98%
Values	Daily Returns

Deutsche Bank Aktiengesellscha  vs.  Fibra Mty SAPI

Deutsche Bank Aktien

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Deutsche Bank showed solid returns over the last few months and may actually be approaching a breakup point.

Fibra Mty SAPI

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fibra Mty SAPI are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Fibra Mty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deutsche Bank and Fibra Mty

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

The idea behind Deutsche Bank Aktiengesellschaft and Fibra Mty SAPI 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.