Correlation Between SAFETY MEDICAL and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL 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 SAFETY MEDICAL and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on SAFETY MEDICAL 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 SAFETY MEDICAL with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and Deutsche Bank.
Diversification Opportunities for SAFETY MEDICAL and Deutsche Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SAFETY and Deutsche is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD 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 SAFETY MEDICAL 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 SAFETY MEDICAL PROD 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 SAFETY MEDICAL i.e., SAFETY MEDICAL and Deutsche Bank go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and Deutsche Bank
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to under-perform the Deutsche Bank. In addition to that, SAFETY MEDICAL is 1.76 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about -0.01 of its total potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.06 per unit of volatility. If you would invest 940.00 in Deutsche Bank Aktiengesellschaft on August 27, 2024 and sell it today you would earn a total of 613.00 from holding Deutsche Bank Aktiengesellschaft or generate 65.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| Deutsche Bank Aktien |
SAFETY MEDICAL and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and Deutsche Bank
The main advantage of trading using opposite SAFETY MEDICAL and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL 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.| SAFETY MEDICAL vs. PARKEN Sport Entertainment | SAFETY MEDICAL vs. REINET INVESTMENTS SCA | SAFETY MEDICAL vs. HK Electric Investments | SAFETY MEDICAL vs. Aluminum of |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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