Correlation Between United Airlines and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both United Airlines 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 United Airlines and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on United Airlines 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 United Airlines with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and Deutsche Bank.
Diversification Opportunities for United Airlines and Deutsche Bank
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Deutsche is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings 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 United Airlines 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 United Airlines Holdings 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 United Airlines i.e., United Airlines and Deutsche Bank go up and down completely randomly.
Pair Corralation between United Airlines and Deutsche Bank
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.56 times more return on investment than Deutsche Bank. However, United Airlines is 1.56 times more volatile than Deutsche Bank Aktiengesellschaft. It trades about 0.51 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.04 per unit of risk. If you would invest 161,400 in United Airlines Holdings on August 31, 2024 and sell it today you would earn a total of 44,600 from holding United Airlines Holdings or generate 27.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Airlines Holdings vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| United Airlines Holdings |
| Deutsche Bank Aktien |
United Airlines and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and Deutsche Bank
The main advantage of trading using opposite United Airlines and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines 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.| United Airlines vs. Southwest Airlines | United Airlines vs. McEwen Mining | United Airlines vs. Grupo Sports World | United Airlines vs. UnitedHealth Group Incorporated |
| Deutsche Bank vs. Verizon Communications | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Micron Technology | Deutsche Bank vs. Applied Materials |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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