Correlation Between Deutsche Bank and Citizens Community

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

Diversification Opportunities for Deutsche Bank and Citizens Community

-0.58

Correlation Coefficient

Deutsche Bank  Citizens Community

Excellent diversification

The 3 months correlation between Deutsche and Citizens is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank AG and Citizens Community Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Community 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 Citizens Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Community has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and Citizens Community go up and down completely randomly.

Pair Corralation between Deutsche Bank and Citizens Community

Allowing for the 90-day total investment horizon Deutsche Bank AG is expected to generate 1.21 times more return on investment than Citizens Community. However, Deutsche Bank is 1.21 times more volatile than Citizens Community Bancorp. It trades about 0.06 of its potential returns per unit of risk. Citizens Community Bancorp is currently generating about -0.01 per unit of risk. If you would invest  933.00  in Deutsche Bank AG on March 8, 2024 and sell it today you would earn a total of  724.00  from holding Deutsche Bank AG or generate 77.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Deutsche Bank AG  vs.  Citizens Community Bancorp

Deutsche Bank AG

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank AG are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Deutsche Bank sustained solid returns over the last few months and may actually be approaching a breakup point.

Citizens Community

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Citizens Community Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Deutsche Bank and Citizens Community

The main advantage of trading using opposite Deutsche Bank and Citizens Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Bank position performs unexpectedly, Citizens Community 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 Citizens Community will offset losses from the drop in Citizens Community's long position.

The idea behind Deutsche Bank AG and Citizens Community Bancorp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.