Correlation Between Deutsche Bank and Cartica Acquisition
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Cartica Acquisition 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 Cartica Acquisition 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 Cartica Acquisition Corp, you can compare the effects of market volatilities on Deutsche Bank and Cartica Acquisition 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 Cartica Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Cartica Acquisition.
Diversification Opportunities for Deutsche Bank and Cartica Acquisition
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Cartica is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Cartica Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartica Acquisition Corp 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 Cartica Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartica Acquisition Corp has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Cartica Acquisition go up and down completely randomly.
Pair Corralation between Deutsche Bank and Cartica Acquisition
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 3.41 times more return on investment than Cartica Acquisition. However, Deutsche Bank is 3.41 times more volatile than Cartica Acquisition Corp. It trades about 0.06 of its potential returns per unit of risk. Cartica Acquisition Corp is currently generating about 0.04 per unit of risk. If you would invest 998.00 in Deutsche Bank AG on August 26, 2024 and sell it today you would earn a total of 622.00 from holding Deutsche Bank AG or generate 62.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Cartica Acquisition Corp
Performance |
| Timeline |
| Deutsche Bank AG |
| Cartica Acquisition Corp |
Deutsche Bank and Cartica Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Cartica Acquisition
The main advantage of trading using opposite Deutsche Bank and Cartica Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Cartica Acquisition 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 Cartica Acquisition will offset losses from the drop in Cartica Acquisition'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 |
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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