Correlation Between Deutsche Bank and Fifth Third
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Fifth Third 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 Fifth Third 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 Fifth Third Bancorp, you can compare the effects of market volatilities on Deutsche Bank and Fifth Third 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 Fifth Third. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Fifth Third.
Diversification Opportunities for Deutsche Bank and Fifth Third
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Deutsche and Fifth is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Fifth Third Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fifth Third 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 Fifth Third. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fifth Third Bancorp has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Fifth Third go up and down completely randomly.
Pair Corralation between Deutsche Bank and Fifth Third
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.98 times more return on investment than Fifth Third. However, Deutsche Bank AG is 1.02 times less risky than Fifth Third. It trades about 0.06 of its potential returns per unit of risk. Fifth Third Bancorp is currently generating about 0.06 per unit of risk. If you would invest 1,004 in Deutsche Bank AG on August 30, 2024 and sell it today you would earn a total of 625.00 from holding Deutsche Bank AG or generate 62.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Fifth Third Bancorp
Performance |
| Timeline |
| Deutsche Bank AG |
| Fifth Third Bancorp |
Deutsche Bank and Fifth Third Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Fifth Third
The main advantage of trading using opposite Deutsche Bank and Fifth Third positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Fifth Third 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 Fifth Third will offset losses from the drop in Fifth Third'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 |
| Fifth Third vs. KeyCorp | Fifth Third vs. Regions Financial | Fifth Third vs. Zions Bancorporation | Fifth Third vs. Huntington Bancshares Incorporated |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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