Correlation Between Transport International and Deutsche Bank

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

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

Diversification Opportunities for Transport International and Deutsche Bank

-0.12

Correlation Coefficient

Transport International  Deutsche Bank

Good diversification

The 3 months correlation between Transport and Deutsche is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin 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 Transport International 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 Transport International Holdings 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 Transport International i.e., Transport International and Deutsche Bank go up and down completely randomly.

Pair Corralation between Transport International and Deutsche Bank

Assuming the 90 days horizon Transport International is expected to generate 2.31 times less return on investment than Deutsche Bank. In addition to that, Transport International is 1.31 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 0.11 per unit of volatility. If you would invest  1,592  in Deutsche Bank Aktiengesellschaft on October 6, 2024 and sell it today you would earn a total of  105.00  from holding Deutsche Bank Aktiengesellschaft or generate 6.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Transport International Holdin  vs.  Deutsche Bank Aktiengesellscha

Transport International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transport International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transport International is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Deutsche Bank Aktien

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, Deutsche Bank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Transport International and Deutsche Bank

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