Correlation Between ASA Gold and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both ASA Gold 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 ASA Gold and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASA Gold and and Deutsche Bank AG, you can compare the effects of market volatilities on ASA Gold 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 ASA Gold with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASA Gold and Deutsche Bank.
Diversification Opportunities for ASA Gold and Deutsche Bank
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ASA and Deutsche is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding ASA Gold and 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 ASA Gold 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 ASA Gold and 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 ASA Gold i.e., ASA Gold and Deutsche Bank go up and down completely randomly.
Pair Corralation between ASA Gold and Deutsche Bank
Considering the 90-day investment horizon ASA Gold and is expected to generate 0.87 times more return on investment than Deutsche Bank. However, ASA Gold and is 1.14 times less risky than Deutsche Bank. It trades about 0.08 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.06 per unit of risk. If you would invest 1,729 in ASA Gold and on September 19, 2024 and sell it today you would earn a total of 297.00 from holding ASA Gold and or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
ASA Gold and vs. Deutsche Bank AG
Performance |
| Timeline |
| ASA Gold |
| Deutsche Bank AG |
ASA Gold and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASA Gold and Deutsche Bank
The main advantage of trading using opposite ASA Gold and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASA Gold 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 ASA Gold and 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.| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Banco Santander Brasil | Deutsche Bank vs. Western Alliance Bancorporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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