Correlation Between Deutsche Bank and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Bridgewater Bancshares 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 Bridgewater Bancshares 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 Bridgewater Bancshares Depositary, you can compare the effects of market volatilities on Deutsche Bank and Bridgewater Bancshares 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 Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Bridgewater Bancshares.
Diversification Opportunities for Deutsche Bank and Bridgewater Bancshares
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and Bridgewater is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Bridgewater Bancshares Deposit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares 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 Bridgewater Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgewater Bancshares has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between Deutsche Bank and Bridgewater Bancshares
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.91 times more return on investment than Bridgewater Bancshares. However, Deutsche Bank AG is 1.1 times less risky than Bridgewater Bancshares. It trades about -0.09 of its potential returns per unit of risk. Bridgewater Bancshares Depositary is currently generating about -0.09 per unit of risk. If you would invest 1,713 in Deutsche Bank AG on August 27, 2024 and sell it today you would lose (65.00) from holding Deutsche Bank AG or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Bridgewater Bancshares Deposit
Performance |
| Timeline |
| Deutsche Bank AG |
| Bridgewater Bancshares |
Deutsche Bank and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Bridgewater Bancshares
The main advantage of trading using opposite Deutsche Bank and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Bridgewater Bancshares 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 Bridgewater Bancshares will offset losses from the drop in Bridgewater Bancshares' 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 |
| Bridgewater Bancshares vs. Capital One Financial | Bridgewater Bancshares vs. Capital One Financial | Bridgewater Bancshares vs. Bank of America |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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