Correlation Between Hitachi Construction and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction and Deutsche Bank 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 Hitachi Construction and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Hitachi Construction and Deutsche Bank 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 Hitachi Construction with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and Deutsche Bank.
Diversification Opportunities for Hitachi Construction and Deutsche Bank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hitachi and Deutsche is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and Deutsche Bank Aktiengesellscha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank Aktien and Hitachi Construction 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 Hitachi Construction Machinery are associated (or correlated) with Deutsche Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Bank Aktien has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and Deutsche Bank go up and down completely randomly.
Pair Corralation between Hitachi Construction and Deutsche Bank
Assuming the 90 days horizon Hitachi Construction Machinery is expected to generate 1.11 times more return on investment than Deutsche Bank. However, Hitachi Construction is 1.11 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.15 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.07 per unit of risk. If you would invest 1,980 in Hitachi Construction Machinery on September 3, 2024 and sell it today you would earn a total of 120.00 from holding Hitachi Construction Machinery or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Hitachi Construction |
| Deutsche Bank Aktien |
Hitachi Construction and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and Deutsche Bank
The main advantage of trading using opposite Hitachi Construction and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction position performs unexpectedly, Deutsche Bank 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 Deutsche Bank will offset losses from the drop in Deutsche Bank's long position.| Hitachi Construction vs. REVO INSURANCE SPA | Hitachi Construction vs. TFS FINANCIAL | Hitachi Construction vs. Cars Inc | Hitachi Construction vs. Geely Automobile Holdings |
| Deutsche Bank vs. WisdomTree Investments | Deutsche Bank vs. GLG LIFE TECH | Deutsche Bank vs. Strategic Investments AS | Deutsche Bank vs. SLR Investment Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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