Correlation Between Deutsche Bank and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Grupo Aval 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 Grupo Aval 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 Grupo Aval Acciones, you can compare the effects of market volatilities on Deutsche Bank and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Grupo Aval.
Diversification Opportunities for Deutsche Bank and Grupo Aval
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and Grupo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Grupo Aval Acciones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval Acciones 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval Acciones has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Grupo Aval go up and down completely randomly.
Pair Corralation between Deutsche Bank and Grupo Aval
Assuming the 90 days horizon Deutsche Bank is expected to generate 2.19 times less return on investment than Grupo Aval. In addition to that, Deutsche Bank is 1.09 times more volatile than Grupo Aval Acciones. It trades about 0.09 of its total potential returns per unit of risk. Grupo Aval Acciones is currently generating about 0.22 per unit of volatility. If you would invest 177.00 in Grupo Aval Acciones on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Grupo Aval Acciones or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Grupo Aval Acciones
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Grupo Aval Acciones |
Deutsche Bank and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Grupo Aval
The main advantage of trading using opposite Deutsche Bank and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval's long position.| Deutsche Bank vs. LIFENET INSURANCE CO | Deutsche Bank vs. Zurich Insurance Group | Deutsche Bank vs. Hitachi Construction Machinery | Deutsche Bank vs. REVO INSURANCE SPA |
| Grupo Aval vs. Nucletron Electronic Aktiengesellschaft | Grupo Aval vs. UET United Electronic | Grupo Aval vs. Arrow Electronics | Grupo Aval vs. Renesas Electronics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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