Correlation Between Walmart and DEUTSCHE
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By analyzing existing cross correlation between Walmart and DEUTSCHE BANK AG, you can compare the effects of market volatilities on Walmart 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 Walmart with a short position of DEUTSCHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walmart and DEUTSCHE.
Diversification Opportunities for Walmart and DEUTSCHE
Very poor diversification
The 3 months correlation between Walmart and DEUTSCHE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Walmart 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 Walmart 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 Walmart 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 Walmart i.e., Walmart and DEUTSCHE go up and down completely randomly.
Pair Corralation between Walmart and DEUTSCHE
Considering the 90-day investment horizon Walmart is expected to generate 15.21 times less return on investment than DEUTSCHE. But when comparing it to its historical volatility, Walmart is 48.92 times less risky than DEUTSCHE. It trades about 0.15 of its potential returns per unit of risk. DEUTSCHE BANK AG is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,072 in DEUTSCHE BANK AG on October 28, 2024 and sell it today you would earn a total of 329.00 from holding DEUTSCHE BANK AG or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 78.38% |
| Values | Daily Returns |
Walmart vs. DEUTSCHE BANK AG
Performance |
| Timeline |
| Walmart |
| DEUTSCHE BANK AG |
Walmart and DEUTSCHE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walmart and DEUTSCHE
The main advantage of trading using opposite Walmart and DEUTSCHE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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 Walmart 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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