Correlation Between Genworth Financial and Deutsche Bank

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

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

Diversification Opportunities for Genworth Financial and Deutsche Bank

0.0

Correlation Coefficient

Genworth Financial  Deutsche Bank

Pay attention - limited upside

The 3 months correlation between Genworth and Deutsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genworth Financial 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 Genworth Financial 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 Genworth Financial 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 Genworth Financial i.e., Genworth Financial and Deutsche Bank go up and down completely randomly.

Pair Corralation between Genworth Financial and Deutsche Bank

Assuming the 90 days trading horizon Genworth Financial is expected to generate 45.99 times less return on investment than Deutsche Bank. But when comparing it to its historical volatility, Genworth Financial is 2.76 times less risky than Deutsche Bank. It trades about 0.01 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  19,596  in Deutsche Bank Aktiengesellschaft on December 2, 2024 and sell it today you would earn a total of  24,206  from holding Deutsche Bank Aktiengesellschaft or generate 123.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	53.04%
Values	Daily Returns

Genworth Financial  vs.  Deutsche Bank Aktiengesellscha

Genworth Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genworth Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Genworth Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Deutsche Bank Aktien

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 16 (%) 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.

Pair Trading with Genworth Financial and Deutsche Bank

The main advantage of trading using opposite Genworth Financial and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genworth Financial 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 Genworth Financial 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..