Correlation Between Lumia and DEUTSCHE
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By analyzing existing cross correlation between Lumia and DEUTSCHE BANK AG, you can compare the effects of market volatilities on Lumia and DEUTSCHE 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 Lumia with a short position of DEUTSCHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lumia and DEUTSCHE.
Diversification Opportunities for Lumia and DEUTSCHE
Modest diversification
The 3 months correlation between Lumia and DEUTSCHE is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lumia 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 Lumia 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 Lumia are associated (or correlated) with DEUTSCHE. 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 Lumia i.e., Lumia and DEUTSCHE go up and down completely randomly.
Pair Corralation between Lumia and DEUTSCHE
Assuming the 90 days trading horizon Lumia is expected to under-perform the DEUTSCHE. In addition to that, Lumia is 6.77 times more volatile than DEUTSCHE BANK AG. It trades about -0.37 of its total potential returns per unit of risk. DEUTSCHE BANK AG is currently generating about -0.19 per unit of volatility. If you would invest 9,639 in DEUTSCHE BANK AG on October 28, 2024 and sell it today you would lose (238.00) from holding DEUTSCHE BANK AG or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Lumia vs. DEUTSCHE BANK AG
Performance |
| Timeline |
| Lumia |
| DEUTSCHE BANK AG |
Lumia and DEUTSCHE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lumia and DEUTSCHE
The main advantage of trading using opposite Lumia and DEUTSCHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lumia position performs unexpectedly, DEUTSCHE 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 will offset losses from the drop in DEUTSCHE's long position.The idea behind Lumia and DEUTSCHE BANK AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| DEUTSCHE vs. Valneva SE ADR | DEUTSCHE vs. Life360, Common Stock | DEUTSCHE vs. Viemed Healthcare | DEUTSCHE vs. DHI Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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