Correlation Between Société Générale and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Société Générale 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 Société Générale and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Socit Gnrale Socit and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Société Générale 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 Société Générale with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Société Générale and Deutsche Bank.
Diversification Opportunities for Société Générale and Deutsche Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Société and Deutsche is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Socit Gnrale Socit 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 Société Générale 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 Socit Gnrale Socit 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 Société Générale i.e., Société Générale and Deutsche Bank go up and down completely randomly.
Pair Corralation between Société Générale and Deutsche Bank
Assuming the 90 days trading horizon Socit Gnrale Socit is expected to under-perform the Deutsche Bank. In addition to that, Société Générale is 1.13 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 0.03 per unit of volatility. If you would invest 1,536 in Deutsche Bank Aktiengesellschaft on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Deutsche Bank Aktiengesellschaft or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Socit Gnrale Socit vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Socit Gnrale Socit |
| Deutsche Bank Aktien |
Société Générale and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Société Générale and Deutsche Bank
The main advantage of trading using opposite Société Générale and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Société Générale 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.| Société Générale vs. Constellation Software | Société Générale vs. Nippon Steel | Société Générale vs. ALGOMA STEEL GROUP | Société Générale vs. FORMPIPE SOFTWARE AB |
| Deutsche Bank vs. AAC TECHNOLOGHLDGADR | Deutsche Bank vs. Ryanair Holdings plc | Deutsche Bank vs. SOFI TECHNOLOGIES | Deutsche Bank vs. Pembina Pipeline Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |