Correlation Between Deutsche Bank and Infineon Technologies
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Infineon Technologies 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 Infineon Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank AG and Infineon Technologies AG, you can compare the effects of market volatilities on Deutsche Bank and Infineon Technologies 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 Infineon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Infineon Technologies.
Diversification Opportunities for Deutsche Bank and Infineon Technologies
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and Infineon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Infineon Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infineon Technologies 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 AG are associated (or correlated) with Infineon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infineon Technologies has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Infineon Technologies go up and down completely randomly.
Pair Corralation between Deutsche Bank and Infineon Technologies
Assuming the 90 days trading horizon Deutsche Bank is expected to generate 1.3 times less return on investment than Infineon Technologies. But when comparing it to its historical volatility, Deutsche Bank AG is 2.04 times less risky than Infineon Technologies. It trades about 0.59 of its potential returns per unit of risk. Infineon Technologies AG is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,242,000 in Infineon Technologies AG on September 14, 2024 and sell it today you would earn a total of 131,000 from holding Infineon Technologies AG or generate 10.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Infineon Technologies AG
Performance |
| Timeline |
| Deutsche Bank AG |
| Infineon Technologies |
Deutsche Bank and Infineon Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Infineon Technologies
The main advantage of trading using opposite Deutsche Bank and Infineon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Infineon Technologies 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 Infineon Technologies will offset losses from the drop in Infineon Technologies' long position.| Deutsche Bank vs. Infineon Technologies AG | Deutsche Bank vs. NordTelekom Telecommunications Service | Deutsche Bank vs. OTP Bank Nyrt |
| Infineon Technologies vs. OTP Bank Nyrt | Infineon Technologies vs. MOL Nyrt | Infineon Technologies vs. OPUS GLOBAL Nyrt | Infineon Technologies vs. ALTEO Energiaszolgaltato Nyrt |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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