Correlation Between Deutsche Bank and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and Compass Diversified 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 Compass Diversified 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 Compass Diversified Holdings, you can compare the effects of market volatilities on Deutsche Bank and Compass Diversified 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 Compass Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and Compass Diversified.
Diversification Opportunities for Deutsche Bank and Compass Diversified
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Deutsche and Compass is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Compass Diversified Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified 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 Compass Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Diversified has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Compass Diversified go up and down completely randomly.
Pair Corralation between Deutsche Bank and Compass Diversified
Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 0.6 times more return on investment than Compass Diversified. However, Deutsche Bank AG is 1.66 times less risky than Compass Diversified. It trades about 0.12 of its potential returns per unit of risk. Compass Diversified Holdings is currently generating about -0.04 per unit of risk. If you would invest 943.00 in Deutsche Bank AG on March 14, 2025 and sell it today you would earn a total of 1,877 from holding Deutsche Bank AG or generate 199.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Bank AG vs. Compass Diversified Holdings
Performance |
| Timeline |
| Deutsche Bank AG |
| Compass Diversified |
Deutsche Bank and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Bank and Compass Diversified
The main advantage of trading using opposite Deutsche Bank and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Compass Diversified 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 Compass Diversified will offset losses from the drop in Compass Diversified'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 |
| Compass Diversified vs. Matthews International | Compass Diversified vs. Valmont Industries | Compass Diversified vs. Brookfield Business Partners | Compass Diversified vs. Griffon |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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