Correlation Between Deutsche Bank and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on Deutsche Bank and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Coca Cola.
Diversification Opportunities for Deutsche Bank and Coca Cola
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Coca is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Coca Cola go up and down completely randomly.
Pair Corralation between Deutsche Bank and Coca Cola
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to generate 1.07 times more return on investment than Coca Cola. However, Deutsche Bank is 1.07 times more volatile than The Coca Cola. It trades about 0.24 of its potential returns per unit of risk. The Coca Cola is currently generating about -0.03 per unit of risk. If you would invest 33,500 in Deutsche Bank Aktiengesellschaft on September 12, 2024 and sell it today you would earn a total of 2,304 from holding Deutsche Bank Aktiengesellschaft or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. The Coca Cola
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Coca Cola |
Deutsche Bank and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Coca Cola
The main advantage of trading using opposite Deutsche Bank and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. The Select Sector | Deutsche Bank vs. Promotora y Operadora | Deutsche Bank vs. iShares Global Timber |
| Coca Cola vs. Capital One Financial | Coca Cola vs. Applied Materials | Coca Cola vs. Hoteles City Express | Coca Cola vs. Delta Air Lines |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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