Correlation Between Honeywell International and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Honeywell International 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 Honeywell International and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Honeywell International and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Honeywell International 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 Honeywell International with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Honeywell International and Deutsche Bank.
Diversification Opportunities for Honeywell International and Deutsche Bank
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Honeywell and Deutsche is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Honeywell International 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 Honeywell International 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 Honeywell International 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 Honeywell International i.e., Honeywell International and Deutsche Bank go up and down completely randomly.
Pair Corralation between Honeywell International and Deutsche Bank
Assuming the 90 days trading horizon Honeywell International is expected to under-perform the Deutsche Bank. In addition to that, Honeywell International is 1.01 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about -0.02 of its total potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.37 per unit of volatility. If you would invest 35,804 in Deutsche Bank Aktiengesellschaft on October 29, 2024 and sell it today you would earn a total of 4,196 from holding Deutsche Bank Aktiengesellschaft or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Honeywell International vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Honeywell International |
| Deutsche Bank Aktien |
Honeywell International and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Honeywell International and Deutsche Bank
The main advantage of trading using opposite Honeywell International and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Honeywell International 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.| Honeywell International vs. 3M Company | Honeywell International vs. Emerson Electric Co | Honeywell International vs. iShares Global Timber | Honeywell International vs. Vanguard World |
| Deutsche Bank vs. The Home Depot | Deutsche Bank vs. Monster Beverage Corp | Deutsche Bank vs. CVS Health | Deutsche Bank vs. Prudential Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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