Correlation Between Deutsche Bank and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Eagle Bancorp 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 Eagle Bancorp 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 Eagle Bancorp, you can compare the effects of market volatilities on Deutsche Bank and Eagle Bancorp 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 Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Eagle Bancorp.
Diversification Opportunities for Deutsche Bank and Eagle Bancorp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Eagle is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Eagle Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp 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 Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Eagle Bancorp go up and down completely randomly.
Pair Corralation between Deutsche Bank and Eagle Bancorp
Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 1.01 times less return on investment than Eagle Bancorp. But when comparing it to its historical volatility, Deutsche Bank AG is 1.24 times less risky than Eagle Bancorp. It trades about 0.24 of its potential returns per unit of risk. Eagle Bancorp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,470 in Eagle Bancorp on November 8, 2024 and sell it today you would earn a total of 225.00 from holding Eagle Bancorp or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Deutsche Bank AG vs. Eagle Bancorp
Performance |
| Timeline |
| Deutsche Bank AG |
| Eagle Bancorp |
Deutsche Bank and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Eagle Bancorp
The main advantage of trading using opposite Deutsche Bank and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Eagle Bancorp 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 Eagle Bancorp will offset losses from the drop in Eagle Bancorp's long position.| Deutsche Bank vs. EZCORP Inc | Deutsche Bank vs. Orix Corp Ads | Deutsche Bank vs. SLM Corp | Deutsche Bank vs. Navient Corp |
| Eagle Bancorp vs. Peoples Bancorp | Eagle Bancorp vs. Northrim BanCorp | Eagle Bancorp vs. United Bankshares | Eagle Bancorp vs. Pacific Premier Bancorp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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