Correlation Between Select Sector and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Select Sector 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 Select Sector and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Select Sector and Deutsche Bank Aktiengesellschaft, you can compare the effects of market volatilities on Select Sector 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 Select Sector with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Sector and Deutsche Bank.
Diversification Opportunities for Select Sector and Deutsche Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Select and Deutsche is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Select Sector 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 Select Sector 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 The Select Sector 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 Select Sector i.e., Select Sector and Deutsche Bank go up and down completely randomly.
Pair Corralation between Select Sector and Deutsche Bank
Assuming the 90 days trading horizon Select Sector is expected to generate 1.39 times less return on investment than Deutsche Bank. But when comparing it to its historical volatility, The Select Sector is 1.05 times less risky than Deutsche Bank. It trades about 0.1 of its potential returns per unit of risk. Deutsche Bank Aktiengesellschaft is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 21,856 in Deutsche Bank Aktiengesellschaft on September 3, 2024 and sell it today you would earn a total of 12,348 from holding Deutsche Bank Aktiengesellschaft or generate 56.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.12% |
| Values | Daily Returns |
The Select Sector vs. Deutsche Bank Aktiengesellscha
Performance |
| Timeline |
| Select Sector |
| Deutsche Bank Aktien |
Select Sector and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Sector and Deutsche Bank
The main advantage of trading using opposite Select Sector and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Sector 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.| Select Sector vs. Vanguard Index Funds | Select Sector vs. Vanguard Index Funds | Select Sector vs. Vanguard STAR Funds | Select Sector vs. SPDR SP 500 |
| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. The Select Sector | Deutsche Bank vs. Promotora y Operadora | Deutsche Bank vs. SPDR Series Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |