Correlation Between Deutsche Bank and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and MAHLE Metal 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 MAHLE Metal 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 MAHLE Metal Leve, you can compare the effects of market volatilities on Deutsche Bank and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and MAHLE Metal.
Diversification Opportunities for Deutsche Bank and MAHLE Metal
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and MAHLE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and MAHLE Metal go up and down completely randomly.
Pair Corralation between Deutsche Bank and MAHLE Metal
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 1.0 times more return on investment than MAHLE Metal. However, Deutsche Bank is 1.0 times more volatile than MAHLE Metal Leve. It trades about 0.29 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about 0.01 per unit of risk. If you would invest 10,659 in Deutsche Bank Aktiengesellschaft on October 28, 2024 and sell it today you would earn a total of 976.00 from holding Deutsche Bank Aktiengesellschaft or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. MAHLE Metal Leve
Performance |
| Timeline |
| Deutsche Bank Aktien |
| MAHLE Metal Leve |
Deutsche Bank and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and MAHLE Metal
The main advantage of trading using opposite Deutsche Bank and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| Deutsche Bank vs. Nordon Indstrias Metalrgicas | Deutsche Bank vs. Guidewire Software, | Deutsche Bank vs. METISA Metalrgica Timboense | Deutsche Bank vs. TAL Education Group |
| MAHLE Metal vs. Ser Educacional Sa | MAHLE Metal vs. Yduqs Participaes SA | MAHLE Metal vs. PBG SA | MAHLE Metal vs. Movida Participaes 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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