Correlation Between Deutsche Bank and CASAN Companhia

Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and CASAN Companhia 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 CASAN Companhia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deutsche Bank Aktiengesellschaft and CASAN Companhia, you can compare the effects of market volatilities on Deutsche Bank and CASAN Companhia 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 CASAN Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and CASAN Companhia.

Diversification Opportunities for Deutsche Bank and CASAN Companhia

0.0

Correlation Coefficient

Deutsche Bank  CASAN Companhia

Pay attention - limited upside

The 3 months correlation between Deutsche and CASAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and CASAN Companhia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CASAN Companhia 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 Aktiengesellschaft are associated (or correlated) with CASAN Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CASAN Companhia has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and CASAN Companhia go up and down completely randomly.

Pair Corralation between Deutsche Bank and CASAN Companhia

If you would invest  8,212  in Deutsche Bank Aktiengesellschaft on March 4, 2024 and sell it today you would earn a total of  493.00  from holding Deutsche Bank Aktiengesellschaft or generate 6.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Deutsche Bank Aktiengesellscha  vs.  CASAN Companhia

Deutsche Bank Aktien

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

CASAN Companhia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CASAN Companhia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CASAN Companhia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Deutsche Bank and CASAN Companhia

The main advantage of trading using opposite Deutsche Bank and CASAN Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, CASAN Companhia 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 CASAN Companhia will offset losses from the drop in CASAN Companhia's long position.

The idea behind Deutsche Bank Aktiengesellschaft and CASAN Companhia 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.