Correlation Between Deutsche Bank and ASML Holding
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and ASML Holding 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 ASML Holding 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 ASML Holding NV, you can compare the effects of market volatilities on Deutsche Bank and ASML Holding 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 ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and ASML Holding.
Diversification Opportunities for Deutsche Bank and ASML Holding
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and ASML is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV 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 ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and ASML Holding go up and down completely randomly.
Pair Corralation between Deutsche Bank and ASML Holding
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.76 times more return on investment than ASML Holding. However, Deutsche Bank Aktiengesellschaft is 1.31 times less risky than ASML Holding. It trades about -0.1 of its potential returns per unit of risk. ASML Holding NV is currently generating about -0.12 per unit of risk. If you would invest 10,071 in Deutsche Bank Aktiengesellschaft on August 23, 2024 and sell it today you would lose (336.00) from holding Deutsche Bank Aktiengesellschaft or give up 3.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. ASML Holding NV
Performance |
| Timeline |
| Deutsche Bank Aktien |
| ASML Holding NV |
Deutsche Bank and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and ASML Holding
The main advantage of trading using opposite Deutsche Bank and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.| Deutsche Bank vs. HDFC Bank Limited | Deutsche Bank vs. Ita Unibanco Holding | Deutsche Bank vs. Ita Unibanco Holding | Deutsche Bank vs. Banco Bradesco SA |
| ASML Holding vs. Fidelity National Information | ASML Holding vs. TAL Education Group | ASML Holding vs. Global X Funds | ASML Holding vs. MAHLE Metal Leve |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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