Correlation Between Deutsche Bank and DNB BANK
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and DNB BANK 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 DNB BANK 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 DNB BANK ASA, you can compare the effects of market volatilities on Deutsche Bank and DNB BANK 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 DNB BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and DNB BANK.
Diversification Opportunities for Deutsche Bank and DNB BANK
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and DNB is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and DNB BANK ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNB BANK ASA 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 DNB BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNB BANK ASA has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and DNB BANK go up and down completely randomly.
Pair Corralation between Deutsche Bank and DNB BANK
Assuming the 90 days trading horizon Deutsche Bank is expected to generate 16.27 times less return on investment than DNB BANK. But when comparing it to its historical volatility, Deutsche Bank Aktiengesellschaft is 21.08 times less risky than DNB BANK. It trades about 0.05 of its potential returns per unit of risk. DNB BANK ASA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,750 in DNB BANK ASA on October 15, 2024 and sell it today you would earn a total of 213.00 from holding DNB BANK ASA or generate 12.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. DNB BANK ASA
Performance |
| Timeline |
| Deutsche Bank Aktien |
| DNB BANK ASA |
Deutsche Bank and DNB BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and DNB BANK
The main advantage of trading using opposite Deutsche Bank and DNB BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, DNB BANK 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 DNB BANK will offset losses from the drop in DNB BANK's long position.| Deutsche Bank vs. Santander Bank Polska | Deutsche Bank vs. Superior Plus Corp | Deutsche Bank vs. NMI Holdings | Deutsche Bank vs. SIVERS SEMICONDUCTORS AB |
| DNB BANK vs. Aegean Airlines SA | DNB BANK vs. Ebro Foods SA | DNB BANK vs. CN MODERN DAIRY | DNB BANK vs. PLANT VEDA FOODS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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