Correlation Between Itau Unibanco and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Itau Unibanco 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 Itau Unibanco and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itau Unibanco Banco and Deutsche Bank AG, you can compare the effects of market volatilities on Itau Unibanco 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 Itau Unibanco with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itau Unibanco and Deutsche Bank.
Diversification Opportunities for Itau Unibanco and Deutsche Bank
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Itau and Deutsche is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Itau Unibanco Banco and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG and Itau Unibanco 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 Itau Unibanco Banco 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 AG has no effect on the direction of Itau Unibanco i.e., Itau Unibanco and Deutsche Bank go up and down completely randomly.
Pair Corralation between Itau Unibanco and Deutsche Bank
Given the investment horizon of 90 days Itau Unibanco Banco is expected to generate 1.11 times more return on investment than Deutsche Bank. However, Itau Unibanco is 1.11 times more volatile than Deutsche Bank AG. It trades about 0.44 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.4 per unit of risk. If you would invest 495.00 in Itau Unibanco Banco on November 3, 2024 and sell it today you would earn a total of 85.00 from holding Itau Unibanco Banco or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itau Unibanco Banco vs. Deutsche Bank AG
Performance |
| Timeline |
| Itau Unibanco Banco |
| Deutsche Bank AG |
Itau Unibanco and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itau Unibanco and Deutsche Bank
The main advantage of trading using opposite Itau Unibanco and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itau Unibanco 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.| Itau Unibanco vs. Grupo Financiero Galicia | Itau Unibanco vs. Banco Macro SA | Itau Unibanco vs. Banco Santander Brasil | Itau Unibanco vs. Lloyds Banking Group |
| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
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.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |