Correlation Between Deutsche Bank and BOC Hong
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and BOC Hong 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 BOC Hong 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 BOC Hong Kong, you can compare the effects of market volatilities on Deutsche Bank and BOC Hong 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 BOC Hong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and BOC Hong.
Diversification Opportunities for Deutsche Bank and BOC Hong
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Deutsche and BOC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and BOC Hong Kong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOC Hong Kong 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 BOC Hong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOC Hong Kong has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and BOC Hong go up and down completely randomly.
Pair Corralation between Deutsche Bank and BOC Hong
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.5 times more return on investment than BOC Hong. However, Deutsche Bank is 1.5 times more volatile than BOC Hong Kong. It trades about 0.05 of its potential returns per unit of risk. BOC Hong Kong is currently generating about 0.02 per unit of risk. If you would invest 1,103 in Deutsche Bank AG on September 22, 2024 and sell it today you would earn a total of 590.00 from holding Deutsche Bank AG or generate 53.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. BOC Hong Kong
Performance |
| Timeline |
| Deutsche Bank AG |
| BOC Hong Kong |
Deutsche Bank and BOC Hong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and BOC Hong
The main advantage of trading using opposite Deutsche Bank and BOC Hong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, BOC Hong 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 BOC Hong will offset losses from the drop in BOC Hong's long position.| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
| BOC Hong vs. Banco Bradesco SA | BOC Hong vs. Itau Unibanco Banco | BOC Hong vs. Lloyds Banking Group | BOC Hong vs. Deutsche Bank AG |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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