Correlation Between Deutsche Bank and Eagle Financial
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Eagle Financial 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 Eagle Financial 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 Eagle Financial Services, you can compare the effects of market volatilities on Deutsche Bank and Eagle Financial 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 Eagle Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Eagle Financial.
Diversification Opportunities for Deutsche Bank and Eagle Financial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and Eagle is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Eagle Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Financial Services 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 Eagle Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Financial Services has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Eagle Financial go up and down completely randomly.
Pair Corralation between Deutsche Bank and Eagle Financial
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 9.11 times more return on investment than Eagle Financial. However, Deutsche Bank is 9.11 times more volatile than Eagle Financial Services. It trades about 0.57 of its potential returns per unit of risk. Eagle Financial Services is currently generating about -0.2 per unit of risk. If you would invest 1,345 in Deutsche Bank AG on December 29, 2023 and sell it today you would earn a total of 251.00 from holding Deutsche Bank AG or generate 18.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Deutsche Bank AG vs. Eagle Financial Services
Performance |
Timeline |
Deutsche Bank AG |
Eagle Financial Services |
Deutsche Bank and Eagle Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Deutsche Bank and Eagle Financial
The main advantage of trading using opposite Deutsche Bank and Eagle Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Eagle Financial 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 Eagle Financial will offset losses from the drop in Eagle Financial's long position.Deutsche Bank vs. Visa Class A | Deutsche Bank vs. Diamond Hill Investment | Deutsche Bank vs. Nocturne Acquisition Corp | Deutsche Bank vs. Mountain I Acquisition |
Eagle Financial vs. Procter Gamble | Eagle Financial vs. Ep Emerging Markets | Eagle Financial vs. Bayview Acquisition Corp | Eagle Financial vs. Sun Life 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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