Correlation Between Deutsche Bank and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Brookfield Asset 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 Brookfield Asset 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 Brookfield Asset Management, you can compare the effects of market volatilities on Deutsche Bank and Brookfield Asset 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 Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Brookfield Asset.
Diversification Opportunities for Deutsche Bank and Brookfield Asset
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and Brookfield is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Brookfield Asset go up and down completely randomly.
Pair Corralation between Deutsche Bank and Brookfield Asset
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.82 times more return on investment than Brookfield Asset. However, Deutsche Bank is 1.82 times more volatile than Brookfield Asset Management. It trades about 0.16 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.12 per unit of risk. If you would invest 1,665 in Deutsche Bank AG on September 9, 2024 and sell it today you would earn a total of 114.00 from holding Deutsche Bank AG or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Brookfield Asset Management
Performance |
| Timeline |
| Deutsche Bank AG |
| Brookfield Asset Man |
Deutsche Bank and Brookfield Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Brookfield Asset
The main advantage of trading using opposite Deutsche Bank and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset'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 |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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