Correlation Between Comerica and Deutsche Bank

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Can any of the company-specific risk be diversified away by investing in both Comerica 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 Comerica and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Comerica and Deutsche Bank AG, you can compare the effects of market volatilities on Comerica 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 Comerica with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Comerica and Deutsche Bank.

Diversification Opportunities for Comerica and Deutsche Bank

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Comerica and Deutsche is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Comerica 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 Comerica 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 Comerica 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 Comerica i.e., Comerica and Deutsche Bank go up and down completely randomly.

Pair Corralation between Comerica and Deutsche Bank

Considering the 90-day investment horizon Comerica is expected to generate 1.3 times more return on investment than Deutsche Bank. However, Comerica is 1.3 times more volatile than Deutsche Bank AG. It trades about 0.18 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.08 per unit of risk. If you would invest  6,328  in Comerica on September 6, 2024 and sell it today you would earn a total of  664.00  from holding Comerica or generate 10.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Comerica  vs.  Deutsche Bank AG

 Performance 
       Timeline  
Comerica 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Comerica are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Comerica sustained solid returns over the last few months and may actually be approaching a breakup point.
Deutsche Bank AG 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Deutsche Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Comerica and Deutsche Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Comerica and Deutsche Bank

The main advantage of trading using opposite Comerica and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comerica 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 Comerica 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.
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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