Correlation Between BLUESCOPE STEEL and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL 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 BLUESCOPE STEEL and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on BLUESCOPE STEEL 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 BLUESCOPE STEEL with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and Deutsche Bank.
Diversification Opportunities for BLUESCOPE STEEL and Deutsche Bank
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BLUESCOPE and Deutsche is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL 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 BLUESCOPE STEEL 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 BLUESCOPE STEEL 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 BLUESCOPE STEEL i.e., BLUESCOPE STEEL and Deutsche Bank go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and Deutsche Bank
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 1.15 times more return on investment than Deutsche Bank. However, BLUESCOPE STEEL is 1.15 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.03 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.03 per unit of risk. If you would invest 1,268 in BLUESCOPE STEEL on September 1, 2024 and sell it today you would earn a total of 82.00 from holding BLUESCOPE STEEL or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.24% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| BLUESCOPE STEEL |
| Deutsche Bank Aktien |
BLUESCOPE STEEL and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and Deutsche Bank
The main advantage of trading using opposite BLUESCOPE STEEL and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL 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.| BLUESCOPE STEEL vs. Mizuho Financial Group | BLUESCOPE STEEL vs. The Hanover Insurance | BLUESCOPE STEEL vs. Consolidated Communications Holdings | BLUESCOPE STEEL vs. Charter Communications |
| Deutsche Bank vs. AAC TECHNOLOGHLDGADR | Deutsche Bank vs. Ryanair Holdings plc | Deutsche Bank vs. SOFI TECHNOLOGIES | Deutsche Bank vs. Pembina Pipeline Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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