Correlation Between Deutsche Bank and Washington Federal
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Washington Federal 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 Washington Federal 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 Washington Federal, you can compare the effects of market volatilities on Deutsche Bank and Washington Federal 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 Washington Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Washington Federal.
Diversification Opportunities for Deutsche Bank and Washington Federal
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and Washington is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Washington Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Federal 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 Washington Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Federal has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Washington Federal go up and down completely randomly.
Pair Corralation between Deutsche Bank and Washington Federal
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.79 times more return on investment than Washington Federal. However, Deutsche Bank AG is 1.27 times less risky than Washington Federal. It trades about 0.47 of its potential returns per unit of risk. Washington Federal is currently generating about -0.16 per unit of risk. If you would invest 1,716 in Deutsche Bank AG on November 2, 2024 and sell it today you would earn a total of 258.00 from holding Deutsche Bank AG or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Washington Federal
Performance |
| Timeline |
| Deutsche Bank AG |
| Washington Federal |
Deutsche Bank and Washington Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Washington Federal
The main advantage of trading using opposite Deutsche Bank and Washington Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Washington Federal 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 Washington Federal will offset losses from the drop in Washington Federal'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 |
| Washington Federal vs. Finward Bancorp | Washington Federal vs. Great Southern Bancorp | Washington Federal vs. First Mid Illinois | Washington Federal vs. Franklin Financial Services |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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