Correlation Between NYSE Composite and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Deutsche Bank AG, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Deutsche Bank.
Diversification Opportunities for NYSE Composite and Deutsche Bank
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Deutsche is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Deutsche Bank go up and down completely randomly.
Pair Corralation between NYSE Composite and Deutsche Bank
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.35 times more return on investment than Deutsche Bank. However, NYSE Composite is 2.9 times less risky than Deutsche Bank. It trades about 0.14 of its potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.01 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Deutsche Bank AG
Performance |
| Timeline |
NYSE Composite and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Deutsche Bank AG
Pair trading matchups for Deutsche Bank
Pair Trading with NYSE Composite and Deutsche Bank
The main advantage of trading using opposite NYSE Composite and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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