Correlation Between CVS Health and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both CVS Health 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 CVS Health and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVS Health and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on CVS Health 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 CVS Health with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVS Health and Deutsche Bank.
Diversification Opportunities for CVS Health and Deutsche Bank
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CVS and Deutsche is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CVS Health 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 CVS Health 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 CVS Health 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 CVS Health i.e., CVS Health and Deutsche Bank go up and down completely randomly.
Pair Corralation between CVS Health and Deutsche Bank
Assuming the 90 days trading horizon CVS Health is expected to generate 2.2 times more return on investment than Deutsche Bank. However, CVS Health is 2.2 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.11 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about -0.09 per unit of risk. If you would invest 114,800 in CVS Health on August 28, 2024 and sell it today you would earn a total of 7,699 from holding CVS Health or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVS Health vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| CVS Health |
| Deutsche Bank Aktien |
CVS Health and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVS Health and Deutsche Bank
The main advantage of trading using opposite CVS Health and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVS Health 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.| CVS Health vs. Glencore plc | CVS Health vs. iShares Trust | CVS Health vs. US Bancorp | CVS Health vs. American Express |
| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Glencore plc | Deutsche Bank vs. iShares Trust | Deutsche Bank vs. US Bancorp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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