Correlation Between Financial Select and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Financial Select 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 Financial Select and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Select Sector and Deutsche Bank, you can compare the effects of market volatilities on Financial Select 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 Financial Select with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Select and Deutsche Bank.
Diversification Opportunities for Financial Select and Deutsche Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Financial and Deutsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Financial Select Sector and Deutsche Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank and Financial Select 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 Financial 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 has no effect on the direction of Financial Select i.e., Financial Select and Deutsche Bank go up and down completely randomly.
Pair Corralation between Financial Select and Deutsche Bank
If you would invest 3,340 in Financial Select Sector on January 26, 2024 and sell it today you would earn a total of 772.00 from holding Financial Select Sector or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Financial Select Sector vs. Deutsche Bank
Performance |
| Timeline |
| Financial Select Sector |
| Deutsche Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Financial Select and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Select and Deutsche Bank
The main advantage of trading using opposite Financial Select and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Select 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.| Financial Select vs. Merck Company | Financial Select vs. Chevron Corp | Financial Select vs. MagnaChip Semiconductor |
| Deutsche Bank vs. ProShares Ultra Bloomberg | Deutsche Bank vs. Direxion Daily Semiconductor | Deutsche Bank vs. MicroSectors Big Oil | Deutsche Bank vs. Direxion Daily SP |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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