Correlation Between Deutsche Bank and T Rowe

Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and T Rowe 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 T Rowe 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 T Rowe Price, you can compare the effects of market volatilities on Deutsche Bank and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and T Rowe.

Diversification Opportunities for Deutsche Bank and T Rowe

0.87

Correlation Coefficient

Deutsche Bank  T Rowe

Very poor diversification

The 3 months correlation between Deutsche and TROW is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and T Rowe go up and down completely randomly.

Pair Corralation between Deutsche Bank and T Rowe

Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.37 times more return on investment than T Rowe. However, Deutsche Bank is 1.37 times more volatile than T Rowe Price. It trades about 0.19 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.16 per unit of risk. If you would invest  2,632  in Deutsche Bank AG on May 5, 2025 and sell it today you would earn a total of  621.00  from holding Deutsche Bank AG or generate 23.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Deutsche Bank AG  vs.  T Rowe Price

Deutsche Bank AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 14 (%) 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.

T Rowe Price

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in T Rowe Price are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, T Rowe showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Bank and T Rowe

The main advantage of trading using opposite Deutsche Bank and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Deutsche Bank AG and T Rowe Price 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.