Correlation Between Deutsche Bank and Investcorp Europe
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Investcorp Europe 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 Investcorp Europe 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 Investcorp Europe Acquisition, you can compare the effects of market volatilities on Deutsche Bank and Investcorp Europe 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 Investcorp Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Investcorp Europe.
Diversification Opportunities for Deutsche Bank and Investcorp Europe
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Deutsche and Investcorp is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Investcorp Europe Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Europe 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 Investcorp Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Europe has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Investcorp Europe go up and down completely randomly.
Pair Corralation between Deutsche Bank and Investcorp Europe
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to under-perform the Investcorp Europe. But the stock apears to be less risky and, when comparing its historical volatility, Deutsche Bank AG is 19.04 times less risky than Investcorp Europe. The stock trades about -0.12 of its potential returns per unit of risk. The Investcorp Europe Acquisition is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1.26 in Investcorp Europe Acquisition on August 29, 2024 and sell it today you would earn a total of 0.75 from holding Investcorp Europe Acquisition or generate 59.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 43.48% |
| Values | Daily Returns |
Deutsche Bank AG vs. Investcorp Europe Acquisition
Performance |
| Timeline |
| Deutsche Bank AG |
| Investcorp Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Deutsche Bank and Investcorp Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Investcorp Europe
The main advantage of trading using opposite Deutsche Bank and Investcorp Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Investcorp Europe 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 Investcorp Europe will offset losses from the drop in Investcorp Europe'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 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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