Correlation Between Deutsche Bank and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Regions Financial 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 Regions Financial 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 Regions Financial, you can compare the effects of market volatilities on Deutsche Bank and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Regions Financial.
Diversification Opportunities for Deutsche Bank and Regions Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Regions is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Regions Financial go up and down completely randomly.
Pair Corralation between Deutsche Bank and Regions Financial
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to under-perform the Regions Financial. In addition to that, Deutsche Bank is 2.9 times more volatile than Regions Financial. It trades about -0.14 of its total potential returns per unit of risk. Regions Financial is currently generating about 0.01 per unit of volatility. If you would invest 2,465 in Regions Financial on August 27, 2024 and sell it today you would earn a total of 3.00 from holding Regions Financial or generate 0.12% 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. Regions Financial
Performance |
| Timeline |
| Deutsche Bank AG |
| Regions Financial |
Deutsche Bank and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Regions Financial
The main advantage of trading using opposite Deutsche Bank and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial'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 |
| Regions Financial vs. Capital One Financial | Regions Financial vs. Capital One Financial | Regions Financial vs. Bank of America |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |