Correlation Between FinVolution and Deutsche Bank

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

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

Diversification Opportunities for FinVolution and Deutsche Bank

0.43

Correlation Coefficient

FinVolution  Deutsche Bank

Very weak diversification

The 3 months correlation between FinVolution and Deutsche is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding FinVolution Group and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien and FinVolution 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 FinVolution Group are associated (or correlated) with Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of FinVolution i.e., FinVolution and Deutsche Bank go up and down completely randomly.

Pair Corralation between FinVolution and Deutsche Bank

Given the investment horizon of 90 days FinVolution Group is expected to under-perform the Deutsche Bank. In addition to that, FinVolution is 1.17 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about -0.04 of its total potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.03 per unit of volatility. If you would invest  1,673  in Deutsche Bank Aktiengesellschaft on October 4, 2024 and sell it today you would earn a total of  8.00  from holding Deutsche Bank Aktiengesellschaft or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	86.36%
Values	Daily Returns

FinVolution Group  vs.  Deutsche Bank Aktiengesellscha

FinVolution Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FinVolution Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, FinVolution is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Deutsche Bank Aktien

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking signals, Deutsche Bank 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 FinVolution and Deutsche Bank

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

The idea behind FinVolution Group and Deutsche Bank Aktiengesellschaft 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.