Correlation Between Infineon Technologies and Deutsche Bank

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

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

Diversification Opportunities for Infineon Technologies and Deutsche Bank

0.85

Correlation Coefficient

Infineon Technologies  Deutsche Bank

Very poor diversification

The 3 months correlation between Infineon and Deutsche is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Infineon Technologies AG and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG and Infineon Technologies 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 Infineon Technologies AG 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 AG has no effect on the direction of Infineon Technologies i.e., Infineon Technologies and Deutsche Bank go up and down completely randomly.

Pair Corralation between Infineon Technologies and Deutsche Bank

Assuming the 90 days trading horizon Infineon Technologies is expected to generate 1.86 times less return on investment than Deutsche Bank. In addition to that, Infineon Technologies is 1.54 times more volatile than Deutsche Bank AG. It trades about 0.05 of its total potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.14 per unit of volatility. If you would invest  696,700  in Deutsche Bank AG on December 4, 2024 and sell it today you would earn a total of  80,400  from holding Deutsche Bank AG or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	97.62%
Values	Daily Returns

Infineon Technologies AG  vs.  Deutsche Bank AG

Infineon Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Infineon Technologies AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Infineon Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Deutsche Bank AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infineon Technologies and Deutsche Bank

The main advantage of trading using opposite Infineon Technologies and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infineon Technologies 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 Infineon Technologies AG and Deutsche Bank 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.