Correlation Between Deutsche Bank and KKR Co
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and KKR Co 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 KKR Co 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 KKR Co LP, you can compare the effects of market volatilities on Deutsche Bank and KKR Co 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 KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and KKR Co.
Diversification Opportunities for Deutsche Bank and KKR Co
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and KKR is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP 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 KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and KKR Co go up and down completely randomly.
Pair Corralation between Deutsche Bank and KKR Co
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.1 times more return on investment than KKR Co. However, Deutsche Bank is 1.1 times more volatile than KKR Co LP. It trades about 0.18 of its potential returns per unit of risk. KKR Co LP is currently generating about 0.09 per unit of risk. If you would invest 1,676 in Deutsche Bank AG on September 13, 2024 and sell it today you would earn a total of 113.00 from holding Deutsche Bank AG or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. KKR Co LP
Performance |
| Timeline |
| Deutsche Bank AG |
| KKR Co LP |
Deutsche Bank and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and KKR Co
The main advantage of trading using opposite Deutsche Bank and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, KKR Co 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 KKR Co will offset losses from the drop in KKR Co's long position.| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Banco Santander Brasil | Deutsche Bank vs. Western Alliance Bancorporation |
| KKR Co vs. Carlyle Group | KKR Co vs. Ares Management LP | KKR Co vs. Blackstone Group | KKR Co vs. Blue Owl Capital |
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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