Correlation Between US Bancorp and Deutsche Bank
Can any of the company-specific risk be diversified away by investing in both US Bancorp 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 US Bancorp and Deutsche Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Bancorp and Deutsche Bank AG, you can compare the effects of market volatilities on US Bancorp 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 US Bancorp with a short position of Deutsche Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Bancorp and Deutsche Bank.
Diversification Opportunities for US Bancorp and Deutsche Bank
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between USB-PH and Deutsche is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding US Bancorp 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 US Bancorp 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 US Bancorp 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 US Bancorp i.e., US Bancorp and Deutsche Bank go up and down completely randomly.
Pair Corralation between US Bancorp and Deutsche Bank
Assuming the 90 days trading horizon US Bancorp is expected to under-perform the Deutsche Bank. But the preferred stock apears to be less risky and, when comparing its historical volatility, US Bancorp is 3.75 times less risky than Deutsche Bank. The preferred stock trades about -0.25 of its potential returns per unit of risk. The Deutsche Bank AG is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,348 in Deutsche Bank AG on July 25, 2025 and sell it today you would lose (29.00) from holding Deutsche Bank AG or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Bancorp vs. Deutsche Bank AG
Performance |
| Timeline |
| US Bancorp |
| Deutsche Bank AG |
US Bancorp and Deutsche Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Bancorp and Deutsche Bank
The main advantage of trading using opposite US Bancorp and Deutsche Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Bancorp 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.| US Bancorp vs. Deutsche Bank AG | US Bancorp vs. Wells Fargo | US Bancorp vs. Lloyds Banking Group | US Bancorp vs. PNC Financial Services |
| Deutsche Bank vs. Lloyds Banking Group | Deutsche Bank vs. US Bancorp | Deutsche Bank vs. PNC Financial Services | Deutsche Bank vs. Itau Unibanco Banco |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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