Correlation Between Deutsche Bank and Barclays PLC
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Barclays PLC 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 Barclays PLC 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 Barclays PLC, you can compare the effects of market volatilities on Deutsche Bank and Barclays PLC 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 Barclays PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Barclays PLC.
Diversification Opportunities for Deutsche Bank and Barclays PLC
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Deutsche and Barclays is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Barclays PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays PLC 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 Barclays PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays PLC has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Barclays PLC go up and down completely randomly.
Pair Corralation between Deutsche Bank and Barclays PLC
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.98 times more return on investment than Barclays PLC. However, Deutsche Bank Aktiengesellschaft is 1.02 times less risky than Barclays PLC. It trades about 0.31 of its potential returns per unit of risk. Barclays PLC is currently generating about 0.24 per unit of risk. If you would invest 9,590 in Deutsche Bank Aktiengesellschaft on September 19, 2024 and sell it today you would earn a total of 1,157 from holding Deutsche Bank Aktiengesellschaft or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Barclays PLC
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Barclays PLC |
Deutsche Bank and Barclays PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Barclays PLC
The main advantage of trading using opposite Deutsche Bank and Barclays PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Barclays PLC 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 Barclays PLC will offset losses from the drop in Barclays PLC's long position.| Deutsche Bank vs. HDFC Bank Limited | Deutsche Bank vs. Ita Unibanco Holding | Deutsche Bank vs. Banco Santander SA | Deutsche Bank vs. SVB Financial Group |
| Barclays PLC vs. HSBC Holdings plc | Barclays PLC vs. Wells Fargo | Barclays PLC vs. BTG Pactual Logstica | Barclays PLC vs. Plano Plano Desenvolvimento |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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