Correlation Between Deutsche Bank and FibraHotel
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and FibraHotel 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 FibraHotel 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 FibraHotel, you can compare the effects of market volatilities on Deutsche Bank and FibraHotel 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 FibraHotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and FibraHotel.
Diversification Opportunities for Deutsche Bank and FibraHotel
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and FibraHotel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and FibraHotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FibraHotel 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 FibraHotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FibraHotel has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and FibraHotel go up and down completely randomly.
Pair Corralation between Deutsche Bank and FibraHotel
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.47 times more return on investment than FibraHotel. However, Deutsche Bank Aktiengesellschaft is 2.11 times less risky than FibraHotel. It trades about 0.2 of its potential returns per unit of risk. FibraHotel is currently generating about 0.05 per unit of risk. If you would invest 31,557 in Deutsche Bank Aktiengesellschaft on November 2, 2024 and sell it today you would earn a total of 10,383 from holding Deutsche Bank Aktiengesellschaft or generate 32.9% 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. FibraHotel
Performance |
| Timeline |
| Deutsche Bank Aktien |
| FibraHotel |
Deutsche Bank and FibraHotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and FibraHotel
The main advantage of trading using opposite Deutsche Bank and FibraHotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, FibraHotel 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 FibraHotel will offset losses from the drop in FibraHotel's long position.| Deutsche Bank vs. Genworth Financial | Deutsche Bank vs. First Republic Bank | Deutsche Bank vs. United States Steel | Deutsche Bank vs. Grupo Sports World |
| FibraHotel vs. McEwen Mining | FibraHotel vs. Verizon Communications | FibraHotel vs. Southwest Airlines | FibraHotel vs. Costco Wholesale |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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