Correlation Between Enterprise Financial and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both Enterprise Financial 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 Enterprise Financial and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Financial Services and Deutsche Bank AG, you can compare the effects of market volatilities on Enterprise Financial 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 Enterprise Financial with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Financial and Deutsche Bank.
Diversification Opportunities for Enterprise Financial and Deutsche Bank
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enterprise and Deutsche is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Financial Services 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 Enterprise Financial 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 Enterprise Financial Services 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 Enterprise Financial i.e., Enterprise Financial and Deutsche Bank go up and down completely randomly.
Pair Corralation between Enterprise Financial and Deutsche Bank
Given the investment horizon of 90 days Enterprise Financial is expected to generate 17.96 times less return on investment than Deutsche Bank. In addition to that, Enterprise Financial is 1.12 times more volatile than Deutsche Bank AG. It trades about 0.01 of its total potential returns per unit of risk. Deutsche Bank AG is currently generating about 0.24 per unit of volatility. If you would invest 1,527 in Deutsche Bank AG on January 25, 2024 and sell it today you would earn a total of 121.00 from holding Deutsche Bank AG or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enterprise Financial Services vs. Deutsche Bank AG
Performance |
| Timeline |
| Enterprise Financial |
| Deutsche Bank AG |
Enterprise Financial and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enterprise Financial and Deutsche Bank
The main advantage of trading using opposite Enterprise Financial and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Financial 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.| Enterprise Financial vs. HMN Financial | Enterprise Financial vs. Home Federal Bancorp | Enterprise Financial vs. First Financial Northwest | Enterprise Financial vs. First Northwest Bancorp |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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