Correlation Between Deutsche Bank and Sony
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Sony 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 Sony 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 Sony Group, you can compare the effects of market volatilities on Deutsche Bank and Sony 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 Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Sony.
Diversification Opportunities for Deutsche Bank and Sony
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Deutsche and Sony is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Sony go up and down completely randomly.
Pair Corralation between Deutsche Bank and Sony
Assuming the 90 days trading horizon Deutsche Bank is expected to generate 15.91 times less return on investment than Sony. But when comparing it to its historical volatility, Deutsche Bank Aktiengesellschaft is 1.34 times less risky than Sony. It trades about 0.03 of its potential returns per unit of risk. Sony Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 35,476 in Sony Group on September 4, 2024 and sell it today you would earn a total of 5,324 from holding Sony Group or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. Sony Group
Performance |
| Timeline |
| Deutsche Bank Aktien |
| Sony Group |
Deutsche Bank and Sony Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Sony
The main advantage of trading using opposite Deutsche Bank and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Sony 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 Sony will offset losses from the drop in Sony's long position.| Deutsche Bank vs. Applied Materials | Deutsche Bank vs. Monster Beverage Corp | Deutsche Bank vs. McEwen Mining | Deutsche Bank 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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