Correlation Between Deutsche Bank and Delta Air
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Delta Air 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 Delta Air 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 Delta Air Lines, you can compare the effects of market volatilities on Deutsche Bank and Delta Air 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 Delta Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Delta Air.
Diversification Opportunities for Deutsche Bank and Delta Air
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and Delta is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Delta Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Air Lines 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 Delta Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Air Lines has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Delta Air go up and down completely randomly.
Pair Corralation between Deutsche Bank and Delta Air
Assuming the 90 days trading horizon Deutsche Bank is expected to generate 1.3 times less return on investment than Delta Air. But when comparing it to its historical volatility, Deutsche Bank Aktiengesellschaft is 1.6 times less risky than Delta Air. It trades about 0.32 of its potential returns per unit of risk. Delta Air Lines is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 123,735 in Delta Air Lines on October 24, 2024 and sell it today you would earn a total of 17,268 from holding Delta Air Lines or generate 13.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Delta Air Lines
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Delta Air Lines |
Deutsche Bank and Delta Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Delta Air
The main advantage of trading using opposite Deutsche Bank and Delta Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Delta Air 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 Delta Air will offset losses from the drop in Delta Air's long position.| Deutsche Bank vs. Grupo Carso SAB | Deutsche Bank vs. FibraHotel | Deutsche Bank vs. Micron Technology | Deutsche Bank vs. The Bank of |
| Delta Air vs. Prudential Financial | Delta Air vs. Deutsche Bank Aktiengesellschaft | Delta Air vs. Verizon Communications | Delta Air vs. Southwest Airlines |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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