Correlation Between Deutsche Bank and Dime Community
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Dime Community 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 Dime Community 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 Dime Community Bancshares, you can compare the effects of market volatilities on Deutsche Bank and Dime Community 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 Dime Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Dime Community.
Diversification Opportunities for Deutsche Bank and Dime Community
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Deutsche and Dime is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Dime Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dime Community Bancshares 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 Dime Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dime Community Bancshares has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Dime Community go up and down completely randomly.
Pair Corralation between Deutsche Bank and Dime Community
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.49 times more return on investment than Dime Community. However, Deutsche Bank AG is 2.03 times less risky than Dime Community. It trades about 0.22 of its potential returns per unit of risk. Dime Community Bancshares is currently generating about 0.04 per unit of risk. If you would invest 1,109 in Deutsche Bank AG on January 26, 2024 and sell it today you would earn a total of 539.00 from holding Deutsche Bank AG or generate 48.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Deutsche Bank AG vs. Dime Community Bancshares
Performance |
| Timeline |
| Deutsche Bank AG |
| Dime Community Bancshares |
Deutsche Bank and Dime Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Dime Community
The main advantage of trading using opposite Deutsche Bank and Dime Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Dime Community 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 Dime Community will offset losses from the drop in Dime Community's long position.| Deutsche Bank vs. Banco Bradesco SA | Deutsche Bank vs. Itau Unibanco Banco | Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. Banco Santander Brasil |
| Dime Community vs. Peapack Gladstone Financial | Dime Community vs. Northfield Bancorp | Dime Community vs. Great Southern Bancorp | Dime Community vs. Heritage Financial |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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