Correlation Between Deutsche Pfandbriefbank and GEELY AUTOMOBILE

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

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

Diversification Opportunities for Deutsche Pfandbriefbank and GEELY AUTOMOBILE

-0.74

Correlation Coefficient

Deutsche Pfandbriefbank  GEELY AUTOMOBILE

Pay attention - limited upside

The 3 months correlation between Deutsche and GEELY is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Pfandbriefbank AG and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE and Deutsche Pfandbriefbank 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 Pfandbriefbank AG are associated (or correlated) with GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Deutsche Pfandbriefbank i.e., Deutsche Pfandbriefbank and GEELY AUTOMOBILE go up and down completely randomly.

Pair Corralation between Deutsche Pfandbriefbank and GEELY AUTOMOBILE

Assuming the 90 days trading horizon Deutsche Pfandbriefbank AG is expected to generate 1.19 times more return on investment than GEELY AUTOMOBILE. However, Deutsche Pfandbriefbank is 1.19 times more volatile than GEELY AUTOMOBILE. It trades about -0.01 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about -0.29 per unit of risk. If you would invest  513.00  in Deutsche Pfandbriefbank AG on October 9, 2024 and sell it today you would lose (3.00) from holding Deutsche Pfandbriefbank AG or give up 0.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Deutsche Pfandbriefbank AG  vs.  GEELY AUTOMOBILE

Deutsche Pfandbriefbank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Pfandbriefbank AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GEELY AUTOMOBILE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEELY AUTOMOBILE are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, GEELY AUTOMOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Pfandbriefbank and GEELY AUTOMOBILE

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

The idea behind Deutsche Pfandbriefbank AG and GEELY AUTOMOBILE 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.