Correlation Between Deutsche Bank and Four Leaf
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Four Leaf 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 Four Leaf 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 Four Leaf Acquisition, you can compare the effects of market volatilities on Deutsche Bank and Four Leaf 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 Four Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Four Leaf.
Diversification Opportunities for Deutsche Bank and Four Leaf
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Four is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Four Leaf Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Leaf Acquisition 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 Four Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Leaf Acquisition has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Four Leaf go up and down completely randomly.
Pair Corralation between Deutsche Bank and Four Leaf
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 11.39 times more return on investment than Four Leaf. However, Deutsche Bank is 11.39 times more volatile than Four Leaf Acquisition. It trades about 0.11 of its potential returns per unit of risk. Four Leaf Acquisition is currently generating about 0.15 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 56.00 from holding Deutsche Bank AG or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Four Leaf Acquisition
Performance |
| Timeline |
| Deutsche Bank AG |
| Four Leaf Acquisition |
Deutsche Bank and Four Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Four Leaf
The main advantage of trading using opposite Deutsche Bank and Four Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Four Leaf 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 Four Leaf will offset losses from the drop in Four Leaf'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 |
| Four Leaf vs. Aquagold International | Four Leaf vs. Morningstar Unconstrained Allocation | Four Leaf vs. Thrivent High Yield | Four Leaf vs. Via Renewables |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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