Correlation Between Scientific Games and Deutsche Bank

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

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

Diversification Opportunities for Scientific Games and Deutsche Bank

-0.31

Correlation Coefficient

Scientific Games  Deutsche Bank

Very good diversification

The 3 months correlation between Scientific and Deutsche is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Scientific Games 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 Scientific Games 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 Scientific Games 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 Scientific Games i.e., Scientific Games and Deutsche Bank go up and down completely randomly.

Pair Corralation between Scientific Games and Deutsche Bank

Assuming the 90 days horizon Scientific Games is expected to generate 3.61 times less return on investment than Deutsche Bank. In addition to that, Scientific Games is 1.47 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.03 of its total potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.18 per unit of volatility. If you would invest  1,608  in Deutsche Bank Aktiengesellschaft on October 23, 2024 and sell it today you would earn a total of  262.00  from holding Deutsche Bank Aktiengesellschaft or generate 16.29% return on investment over 90 days.

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

Scientific Games  vs.  Deutsche Bank Aktiengesellscha

Scientific Games

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Scientific Games are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Scientific Games is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Deutsche Bank Aktien

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Deutsche Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scientific Games and Deutsche Bank

The main advantage of trading using opposite Scientific Games and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scientific Games 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 Scientific Games 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.