Correlation Between Deutsche Bank and Ares Commercial
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Ares Commercial 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 Deutsche Bank and Ares Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank AG and Ares Commercial Real, you can compare the effects of market volatilities on Deutsche Bank and Ares Commercial 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 Deutsche Bank with a short position of Ares Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Ares Commercial.
Diversification Opportunities for Deutsche Bank and Ares Commercial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Ares is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Ares Commercial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Commercial Real and Deutsche Bank 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 Deutsche Bank AG are associated (or correlated) with Ares Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Commercial Real has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Ares Commercial go up and down completely randomly.
Pair Corralation between Deutsche Bank and Ares Commercial
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.94 times more return on investment than Ares Commercial. However, Deutsche Bank AG is 1.06 times less risky than Ares Commercial. It trades about 0.09 of its potential returns per unit of risk. Ares Commercial Real is currently generating about -0.07 per unit of risk. If you would invest 1,042 in Deutsche Bank AG on January 10, 2025 and sell it today you would earn a total of 1,108 from holding Deutsche Bank AG or generate 106.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Ares Commercial Real
Performance |
| Timeline |
| Deutsche Bank AG |
| Ares Commercial Real |
Deutsche Bank and Ares Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Ares Commercial
The main advantage of trading using opposite Deutsche Bank and Ares Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Ares Commercial 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 Ares Commercial will offset losses from the drop in Ares Commercial's long position.| Deutsche Bank vs. B Riley Financial | Deutsche Bank vs. B Riley Financial | Deutsche Bank vs. B Riley Financial | Deutsche Bank vs. Aquagold International |
| Ares Commercial vs. Two Harbors Investments | Ares Commercial vs. Apollo Commercial Real | Ares Commercial vs. Ellington Financial | Ares Commercial vs. Dynex Capital |
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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