Correlation Between Deutsche Bank and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Gladstone Investment 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 Gladstone Investment 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 Gladstone Investment, you can compare the effects of market volatilities on Deutsche Bank and Gladstone Investment 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 Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Gladstone Investment.
Diversification Opportunities for Deutsche Bank and Gladstone Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Gladstone is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment 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 Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Gladstone Investment go up and down completely randomly.
Pair Corralation between Deutsche Bank and Gladstone Investment
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.61 times more return on investment than Gladstone Investment. However, Deutsche Bank is 1.61 times more volatile than Gladstone Investment. It trades about 0.06 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of risk. If you would invest 985.00 in Deutsche Bank AG on August 27, 2024 and sell it today you would earn a total of 635.00 from holding Deutsche Bank AG or generate 64.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Gladstone Investment
Performance |
| Timeline |
| Deutsche Bank AG |
| Gladstone Investment |
Deutsche Bank and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Gladstone Investment
The main advantage of trading using opposite Deutsche Bank and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment'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 |
| Gladstone Investment vs. PowerUp Acquisition Corp | Gladstone Investment vs. Aurora Innovation | Gladstone Investment vs. HUMANA INC | Gladstone Investment vs. Aquagold International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |