Correlation Between Deutsche Bank and Byline Bancorp

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Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Byline Bancorp 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 Deutsche Bank and Byline Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Bank AG and Byline Bancorp, you can compare the effects of market volatilities on Deutsche Bank and Byline Bancorp 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 Deutsche Bank with a short position of Byline Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Byline Bancorp.

Diversification Opportunities for Deutsche Bank and Byline Bancorp

-0.07
  Correlation Coefficient

Good diversification

The 3 months correlation between Deutsche and Byline is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Byline Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Byline Bancorp and Deutsche Bank 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 Deutsche Bank AG are associated (or correlated) with Byline Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Byline Bancorp has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Byline Bancorp go up and down completely randomly.

Pair Corralation between Deutsche Bank and Byline Bancorp

Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.41 times more return on investment than Byline Bancorp. However, Deutsche Bank is 1.41 times more volatile than Byline Bancorp. It trades about 0.46 of its potential returns per unit of risk. Byline Bancorp is currently generating about -0.27 per unit of risk. If you would invest  1,297  in Deutsche Bank AG on December 19, 2023 and sell it today you would earn a total of  166.00  from holding Deutsche Bank AG or generate 12.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Deutsche Bank AG  vs.  Byline Bancorp

 Performance 
       Timeline  
Deutsche Bank AG 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Deutsche Bank may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Byline Bancorp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Byline Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Deutsche Bank and Byline Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Deutsche Bank and Byline Bancorp

The main advantage of trading using opposite Deutsche Bank and Byline Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Byline Bancorp 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 Byline Bancorp will offset losses from the drop in Byline Bancorp's long position.
The idea behind Deutsche Bank AG and Byline Bancorp 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.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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