Correlation Between Deutsche Bank and Centrais Eltricas
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Centrais Eltricas 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 Centrais Eltricas 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 Centrais Eltricas Brasileiras, you can compare the effects of market volatilities on Deutsche Bank and Centrais Eltricas 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 Centrais Eltricas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Centrais Eltricas.
Diversification Opportunities for Deutsche Bank and Centrais Eltricas
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and Centrais is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Centrais Eltricas Brasileiras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrais Eltricas 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 Centrais Eltricas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrais Eltricas has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Centrais Eltricas go up and down completely randomly.
Pair Corralation between Deutsche Bank and Centrais Eltricas
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 1.78 times more return on investment than Centrais Eltricas. However, Deutsche Bank is 1.78 times more volatile than Centrais Eltricas Brasileiras. It trades about 0.12 of its potential returns per unit of risk. Centrais Eltricas Brasileiras is currently generating about 0.06 per unit of risk. If you would invest 5,150 in Deutsche Bank Aktiengesellschaft on August 31, 2024 and sell it today you would earn a total of 4,900 from holding Deutsche Bank Aktiengesellschaft or generate 95.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 86.79% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Centrais Eltricas Brasileiras
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Centrais Eltricas |
Deutsche Bank and Centrais Eltricas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Centrais Eltricas
The main advantage of trading using opposite Deutsche Bank and Centrais Eltricas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Centrais Eltricas 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 Centrais Eltricas will offset losses from the drop in Centrais Eltricas' long position.| Deutsche Bank vs. Ita Unibanco Holding | Deutsche Bank vs. Banco Santander SA | Deutsche Bank vs. Itasa Investimentos |
| Centrais Eltricas vs. NextEra Energy | Centrais Eltricas vs. Dominion Energy | Centrais Eltricas vs. Transmissora Aliana de | Centrais Eltricas vs. CPFL Energia SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance |