Correlation Between Deutsche Bank and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition Corp, you can compare the effects of market volatilities on Deutsche Bank and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Mars Acquisition.
Diversification Opportunities for Deutsche Bank and Mars Acquisition
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and Mars is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Mars Acquisition go up and down completely randomly.
Pair Corralation between Deutsche Bank and Mars Acquisition
Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 1.54 times less return on investment than Mars Acquisition. But when comparing it to its historical volatility, Deutsche Bank AG is 1.02 times less risky than Mars Acquisition. It trades about 0.1 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,122 in Mars Acquisition Corp on September 11, 2024 and sell it today you would earn a total of 63.00 from holding Mars Acquisition Corp or generate 5.61% 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. Mars Acquisition Corp
Performance |
Timeline |
Deutsche Bank AG |
Mars Acquisition Corp |
Deutsche Bank and Mars Acquisition Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Deutsche Bank and Mars Acquisition
The main advantage of trading using opposite Deutsche Bank and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition'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 |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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