Correlation Between Barings Global and DWS Aktien

Can any of the company-specific risk be diversified away by investing in both Barings Global and DWS Aktien 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 Barings Global and DWS Aktien into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Barings Global Umbrella and DWS Aktien Strategie, you can compare the effects of market volatilities on Barings Global and DWS Aktien 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 Barings Global with a short position of DWS Aktien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and DWS Aktien.

Diversification Opportunities for Barings Global and DWS Aktien

-0.35

Correlation Coefficient

Barings Global  DWS Aktien

Very good diversification

The 3 months correlation between Barings and DWS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Umbrella and DWS Aktien Strategie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS Aktien Strategie and Barings Global 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 Barings Global Umbrella are associated (or correlated) with DWS Aktien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS Aktien Strategie has no effect on the direction of Barings Global i.e., Barings Global and DWS Aktien go up and down completely randomly.

Pair Corralation between Barings Global and DWS Aktien

Assuming the 90 days trading horizon Barings Global Umbrella is expected to under-perform the DWS Aktien. But the fund apears to be less risky and, when comparing its historical volatility, Barings Global Umbrella is 2.0 times less risky than DWS Aktien. The fund trades about -0.07 of its potential returns per unit of risk. The DWS Aktien Strategie is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  50,214  in DWS Aktien Strategie on December 24, 2024 and sell it today you would earn a total of  6,924  from holding DWS Aktien Strategie or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Barings Global Umbrella  vs.  DWS Aktien Strategie

Barings Global Umbrella

Risk-Adjusted Performance

Very Weak

Over the last 90 days Barings Global Umbrella has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Barings Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

DWS Aktien Strategie

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DWS Aktien Strategie are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak basic indicators, DWS Aktien reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Barings Global and DWS Aktien

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

The idea behind Barings Global Umbrella and DWS Aktien Strategie 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.