Correlation Between Deutsche Bank and Société Générale
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Société Générale 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 Société Générale 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 Socit Gnrale Socit, you can compare the effects of market volatilities on Deutsche Bank and Société Générale 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 Société Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Société Générale.
Diversification Opportunities for Deutsche Bank and Société Générale
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Deutsche and Société is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Société Générale go up and down completely randomly.
Pair Corralation between Deutsche Bank and Société Générale
Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 1.31 times less return on investment than Société Générale. But when comparing it to its historical volatility, Deutsche Bank AG is 1.69 times less risky than Société Générale. It trades about 0.12 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,200 in Socit Gnrale Socit on November 28, 2024 and sell it today you would earn a total of 1,656 from holding Socit Gnrale Socit or generate 75.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 68.81% |
| Values | Daily Returns |
Deutsche Bank AG vs. Socit Gnrale Socit
Performance |
| Timeline |
| Deutsche Bank AG |
| Socit Gnrale Socit |
Deutsche Bank and Société Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Société Générale
The main advantage of trading using opposite Deutsche Bank and Société Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Société Générale 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 Société Générale will offset losses from the drop in Société Générale'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 |
| Société Générale vs. Banco Bradesco SA | Société Générale vs. Itau Unibanco Banco | Société Générale vs. Lloyds Banking Group | Société Générale vs. Deutsche Bank AG |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |