Correlation Between Deutsche Bank and United States
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on Deutsche Bank and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and United States.
Diversification Opportunities for Deutsche Bank and United States
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and United is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and United States go up and down completely randomly.
Pair Corralation between Deutsche Bank and United States
Assuming the 90 days trading horizon Deutsche Bank Aktiengesellschaft is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, Deutsche Bank Aktiengesellschaft is 2.47 times less risky than United States. The stock trades about -0.09 of its potential returns per unit of risk. The United States Steel is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 76,568 in United States Steel on August 28, 2024 and sell it today you would earn a total of 8,212 from holding United States Steel or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Deutsche Bank Aktiengesellscha vs. United States Steel
Performance |
| Timeline |
| Deutsche Bank Aktien |
| United States Steel |
Deutsche Bank and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and United States
The main advantage of trading using opposite Deutsche Bank and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Glencore plc | Deutsche Bank vs. iShares Trust | Deutsche Bank vs. US Bancorp |
| United States vs. The Select Sector | United States vs. Promotora y Operadora | United States vs. iShares Global Timber | United States vs. SPDR Series Trust |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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