Correlation Between Deutsche Bank and BBVA Banco

Can any of the company-specific risk be diversified away by investing in both Deutsche Bank and BBVA Banco 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 BBVA Banco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deutsche Bank Aktiengesellschaft and BBVA Banco Frances, you can compare the effects of market volatilities on Deutsche Bank and BBVA Banco 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 BBVA Banco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Bank and BBVA Banco.

Diversification Opportunities for Deutsche Bank and BBVA Banco

-0.54

Correlation Coefficient

Deutsche Bank  BBVA Banco

Excellent diversification

The 3 months correlation between Deutsche and BBVA is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Bank Aktiengesellscha and BBVA Banco Frances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBVA Banco Frances 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 Aktiengesellschaft are associated (or correlated) with BBVA Banco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBVA Banco Frances has no effect on the direction of Deutsche Bank i.e., Deutsche Bank and BBVA Banco go up and down completely randomly.

Pair Corralation between Deutsche Bank and BBVA Banco

Assuming the 90 days horizon Deutsche Bank Aktiengesellschaft is expected to generate 0.53 times more return on investment than BBVA Banco. However, Deutsche Bank Aktiengesellschaft is 1.89 times less risky than BBVA Banco. It trades about 0.18 of its potential returns per unit of risk. BBVA Banco Frances is currently generating about -0.18 per unit of risk. If you would invest  2,153  in Deutsche Bank Aktiengesellschaft on April 24, 2025 and sell it today you would earn a total of  435.00  from holding Deutsche Bank Aktiengesellschaft or generate 20.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Deutsche Bank Aktiengesellscha  vs.  BBVA Banco Frances

Deutsche Bank Aktien

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Bank Aktiengesellschaft are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Deutsche Bank reported solid returns over the last few months and may actually be approaching a breakup point.

BBVA Banco Frances

Risk-Adjusted Performance

Very Weak

Over the last 90 days BBVA Banco Frances has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Deutsche Bank and BBVA Banco

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

The idea behind Deutsche Bank Aktiengesellschaft and BBVA Banco Frances 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.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.