Correlation Between Deutsche Bank and DBS Group
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and DBS Group 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 DBS Group 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 DBS Group Holdings, you can compare the effects of market volatilities on Deutsche Bank and DBS Group 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 DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and DBS Group.
Diversification Opportunities for Deutsche Bank and DBS Group
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and DBS is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings 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 DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and DBS Group go up and down completely randomly.
Pair Corralation between Deutsche Bank and DBS Group
Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 512.67 times less return on investment than DBS Group. In addition to that, Deutsche Bank is 1.44 times more volatile than DBS Group Holdings. It trades about 0.0 of its total potential returns per unit of risk. DBS Group Holdings is currently generating about 0.11 per unit of volatility. If you would invest 10,392 in DBS Group Holdings on August 29, 2024 and sell it today you would earn a total of 2,078 from holding DBS Group Holdings or generate 20.0% 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. DBS Group Holdings
Performance |
| Timeline |
| Deutsche Bank AG |
| DBS Group Holdings |
Deutsche Bank and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and DBS Group
The main advantage of trading using opposite Deutsche Bank and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group'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 |
| DBS Group vs. Invesco High Income | DBS Group vs. Blackrock Muniholdings Ny | DBS Group vs. Nuveen California Select | DBS Group vs. MFS Investment Grade |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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