Correlation Between Deutsche Bank and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Ameriprise 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 Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank Aktiengesellschaft and Ameriprise Financial, you can compare the effects of market volatilities on Deutsche Bank and Ameriprise 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 Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Ameriprise Financial.
Diversification Opportunities for Deutsche Bank and Ameriprise Financial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Ameriprise is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise 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 Aktiengesellschaft are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Deutsche Bank and Ameriprise Financial
Assuming the 90 days trading horizon Deutsche Bank is expected to generate 22.8 times less return on investment than Ameriprise Financial. But when comparing it to its historical volatility, Deutsche Bank Aktiengesellschaft is 1.2 times less risky than Ameriprise Financial. It trades about 0.02 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 63,397 in Ameriprise Financial on August 30, 2024 and sell it today you would earn a total of 20,901 from holding Ameriprise Financial or generate 32.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Ameriprise Financial
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Ameriprise Financial |
Deutsche Bank and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Ameriprise Financial
The main advantage of trading using opposite Deutsche Bank and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Ameriprise 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Deutsche Bank vs. Ita Unibanco Holding | Deutsche Bank vs. Itasa Investimentos | Deutsche Bank vs. BRB Banco |
| Ameriprise Financial vs. Bread Financial Holdings | Ameriprise Financial vs. Costco Wholesale | Ameriprise Financial vs. Monster Beverage | Ameriprise Financial vs. Lloyds Banking Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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