Correlation Between Meridian Bancorp and Deutsche Bank

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

By analyzing existing cross correlation between Meridian Bancorp and Deutsche Bank AG, you can compare the effects of market volatilities on Meridian Bancorp 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 Meridian Bancorp with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meridian Bancorp and Deutsche Bank.

Diversification Opportunities for Meridian Bancorp and Deutsche Bank

0.0

Correlation Coefficient

Meridian Bancorp  Deutsche Bank

Pay attention - limited upside

The 3 months correlation between Meridian and Deutsche is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Meridian Bancorp and Deutsche Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Bank AG and Meridian Bancorp 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 Meridian Bancorp 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 AG has no effect on the direction of Meridian Bancorp i.e., Meridian Bancorp and Deutsche Bank go up and down completely randomly.

Pair Corralation between Meridian Bancorp and Deutsche Bank

If you would invest  1,596  in Deutsche Bank AG on January 27, 2024 and sell it today you would earn a total of  196.00  from holding Deutsche Bank AG or generate 12.28% return on investment over 90 days.

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

Meridian Bancorp  vs.  Deutsche Bank AG

Meridian Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meridian Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Meridian Bancorp is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Deutsche Bank AG

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Meridian Bancorp and Deutsche Bank

The main advantage of trading using opposite Meridian Bancorp and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meridian Bancorp 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.

The idea behind Meridian Bancorp and Deutsche Bank AG 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.