Correlation Between Carlyle and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Carlyle 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 Carlyle and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Deutsche Bank AG, you can compare the effects of market volatilities on Carlyle 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 Carlyle with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Deutsche Bank.
Diversification Opportunities for Carlyle and Deutsche Bank
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlyle and Deutsche is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group 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 Carlyle 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 Carlyle Group 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 Carlyle i.e., Carlyle and Deutsche Bank go up and down completely randomly.
Pair Corralation between Carlyle and Deutsche Bank
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.49 times more return on investment than Deutsche Bank. However, Carlyle is 1.49 times more volatile than Deutsche Bank AG. It trades about 0.08 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about -0.1 per unit of risk. If you would invest 5,077 in Carlyle Group on August 30, 2024 and sell it today you would earn a total of 193.00 from holding Carlyle Group or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Deutsche Bank AG
Performance |
| Timeline |
| Carlyle Group |
| Deutsche Bank AG |
Carlyle and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Deutsche Bank
The main advantage of trading using opposite Carlyle and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle 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 Carlyle Group 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. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |