Correlation Between Deutsche Bank and Xiaomi
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Xiaomi 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 Xiaomi 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 Xiaomi, you can compare the effects of market volatilities on Deutsche Bank and Xiaomi 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 Xiaomi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Xiaomi.
Diversification Opportunities for Deutsche Bank and Xiaomi
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and Xiaomi is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Xiaomi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi 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 Xiaomi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Xiaomi go up and down completely randomly.
Pair Corralation between Deutsche Bank and Xiaomi
Assuming the 90 days trading horizon Deutsche Bank is expected to generate 4.47 times less return on investment than Xiaomi. But when comparing it to its historical volatility, Deutsche Bank Aktiengesellschaft is 2.1 times less risky than Xiaomi. It trades about 0.03 of its potential returns per unit of risk. Xiaomi is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,400 in Xiaomi on September 5, 2024 and sell it today you would earn a total of 250.00 from holding Xiaomi or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Xiaomi
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Xiaomi |
Deutsche Bank and Xiaomi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Xiaomi
The main advantage of trading using opposite Deutsche Bank and Xiaomi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Xiaomi 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 Xiaomi will offset losses from the drop in Xiaomi's long position.| Deutsche Bank vs. Monster Beverage Corp | Deutsche Bank vs. FibraHotel | Deutsche Bank vs. Martin Marietta Materials | Deutsche Bank vs. Cognizant Technology Solutions |
| Xiaomi vs. Deutsche Bank Aktiengesellschaft | Xiaomi vs. Lloyds Banking Group | Xiaomi vs. Prudential Financial | Xiaomi vs. DXC Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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