Correlation Between Deutsche Bank and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Citizens Financial 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 Citizens Financial 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 Citizens Financial Corp, you can compare the effects of market volatilities on Deutsche Bank and Citizens Financial 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Citizens Financial.
Diversification Opportunities for Deutsche Bank and Citizens Financial
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Citizens is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Citizens Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Corp has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Citizens Financial go up and down completely randomly.
Pair Corralation between Deutsche Bank and Citizens Financial
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.3 times more return on investment than Citizens Financial. However, Deutsche Bank is 1.3 times more volatile than Citizens Financial Corp. It trades about 0.13 of its potential returns per unit of risk. Citizens Financial Corp is currently generating about -0.27 per unit of risk. If you would invest 1,648 in Deutsche Bank AG on September 25, 2024 and sell it today you would earn a total of 70.00 from holding Deutsche Bank AG or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Deutsche Bank AG vs. Citizens Financial Corp
Performance |
| Timeline |
| Deutsche Bank AG |
| Citizens Financial Corp |
Deutsche Bank and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Citizens Financial
The main advantage of trading using opposite Deutsche Bank and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Citizens Financial 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 Citizens Financial will offset losses from the drop in Citizens Financial'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 |
| Citizens Financial vs. Century Next Financial | Citizens Financial vs. Triad Business Bank | Citizens Financial vs. First Ottawa Bancshares | Citizens Financial vs. First Community Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |