Correlation Between Deutsche Brse and CME
Can any of the company-specific risk be diversified away by investing in both Deutsche Brse and CME 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 Brse and CME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Brse AG and CME Group, you can compare the effects of market volatilities on Deutsche Brse and CME 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 Brse with a short position of CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Brse and CME.
Diversification Opportunities for Deutsche Brse and CME
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and CME is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Brse AG and CME Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CME Group and Deutsche Brse 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 Brse AG are associated (or correlated) with CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CME Group has no effect on the direction of Deutsche Brse i.e., Deutsche Brse and CME go up and down completely randomly.
Pair Corralation between Deutsche Brse and CME
Assuming the 90 days horizon Deutsche Brse is expected to generate 2.29 times less return on investment than CME. In addition to that, Deutsche Brse is 1.0 times more volatile than CME Group. It trades about 0.12 of its total potential returns per unit of risk. CME Group is currently generating about 0.28 per unit of volatility. If you would invest 20,949 in CME Group on September 12, 2024 and sell it today you would earn a total of 1,516 from holding CME Group or generate 7.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Deutsche Brse AG vs. CME Group
Performance |
| Timeline |
| Deutsche Brse AG |
| CME Group |
Deutsche Brse and CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Brse and CME
The main advantage of trading using opposite Deutsche Brse and CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Brse position performs unexpectedly, CME 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 CME will offset losses from the drop in CME's long position.| Deutsche Brse vs. PKSHA TECHNOLOGY INC | Deutsche Brse vs. Playtech plc | Deutsche Brse vs. BOS BETTER ONLINE | Deutsche Brse vs. NetSol Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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