Correlation Between Deutsche Bank and Alpha Bank
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Alpha 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 Deutsche Bank and Alpha Bank 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 Alpha Bank SA, you can compare the effects of market volatilities on Deutsche Bank and Alpha 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 Deutsche Bank with a short position of Alpha Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Alpha Bank.
Diversification Opportunities for Deutsche Bank and Alpha Bank
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Alpha is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Alpha Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Bank SA 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 Alpha Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Bank SA has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Alpha Bank go up and down completely randomly.
Pair Corralation between Deutsche Bank and Alpha Bank
Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 1.67 times less return on investment than Alpha Bank. But when comparing it to its historical volatility, Deutsche Bank AG is 2.3 times less risky than Alpha Bank. It trades about 0.06 of its potential returns per unit of risk. Alpha Bank SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Alpha Bank SA on August 26, 2024 and sell it today you would earn a total of 14.00 from holding Alpha Bank SA or generate 58.33% 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. Alpha Bank SA
Performance |
| Timeline |
| Deutsche Bank AG |
| Alpha Bank SA |
Deutsche Bank and Alpha Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Alpha Bank
The main advantage of trading using opposite Deutsche Bank and Alpha Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Alpha 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 Alpha Bank will offset losses from the drop in Alpha Bank's long position.| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Banco Santander Brasil | Deutsche Bank vs. Western Alliance Bancorporation |
| Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
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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