Correlation Between Deutsche Bank and Summit Bancshares
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Summit Bancshares 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 Summit Bancshares 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 Summit Bancshares, you can compare the effects of market volatilities on Deutsche Bank and Summit Bancshares 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 Summit Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Summit Bancshares.
Diversification Opportunities for Deutsche Bank and Summit Bancshares
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Summit is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Summit Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bancshares 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 Summit Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bancshares has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Summit Bancshares go up and down completely randomly.
Pair Corralation between Deutsche Bank and Summit Bancshares
Allowing for the 90-day total investment horizon Deutsche Bank is expected to generate 1.07 times less return on investment than Summit Bancshares. In addition to that, Deutsche Bank is 1.49 times more volatile than Summit Bancshares. It trades about 0.02 of its total potential returns per unit of risk. Summit Bancshares is currently generating about 0.04 per unit of volatility. If you would invest 4,321 in Summit Bancshares on September 25, 2024 and sell it today you would earn a total of 90.00 from holding Summit Bancshares or generate 2.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.88% |
Values | Daily Returns |
Deutsche Bank AG vs. Summit Bancshares
Performance |
Timeline |
Deutsche Bank AG |
Summit Bancshares |
Deutsche Bank and Summit Bancshares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Deutsche Bank and Summit Bancshares
The main advantage of trading using opposite Deutsche Bank and Summit Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Summit Bancshares 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 Summit Bancshares will offset losses from the drop in Summit Bancshares' 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 |
Summit Bancshares vs. Banco Bradesco SA | Summit Bancshares vs. Itau Unibanco Banco | Summit Bancshares vs. Lloyds Banking Group | Summit Bancshares vs. Deutsche Bank AG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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