Correlation Between Home Depot and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Home Depot 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 Home Depot and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Home Depot and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Home Depot 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 Home Depot with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Deutsche Bank.
Diversification Opportunities for Home Depot and Deutsche Bank
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Home and Deutsche is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Home Depot 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 Home Depot 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 The Home Depot 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 Home Depot i.e., Home Depot and Deutsche Bank go up and down completely randomly.
Pair Corralation between Home Depot and Deutsche Bank
Assuming the 90 days horizon Home Depot is expected to generate 2.71 times less return on investment than Deutsche Bank. But when comparing it to its historical volatility, The Home Depot is 1.92 times less risky than Deutsche Bank. It trades about 0.06 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 21,392 in Deutsche Bank Aktiengesellschaft on November 2, 2024 and sell it today you would earn a total of 20,548 from holding Deutsche Bank Aktiengesellschaft or generate 96.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.05% |
| Values | Daily Returns |
The Home Depot vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Home Depot |
| Deutsche Bank Aktien |
Home Depot and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Depot and Deutsche Bank
The main advantage of trading using opposite Home Depot and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot 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.| Home Depot vs. Southern Copper | Home Depot vs. Capital One Financial | Home Depot vs. Verizon Communications | Home Depot vs. Genworth Financial |
| Deutsche Bank vs. Grupo Industrial Saltillo | Deutsche Bank vs. Verizon Communications | Deutsche Bank vs. First Majestic Silver | Deutsche Bank vs. Hoteles City Express |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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