Correlation Between Groupama Entreprises and DWS Aktien

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

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

Diversification Opportunities for Groupama Entreprises and DWS Aktien

0.02

Correlation Coefficient

Groupama Entreprises  DWS Aktien

Significant diversification

The 3 months correlation between Groupama and DWS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Groupama Entreprises N 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 Groupama Entreprises 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 Groupama Entreprises N 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 Groupama Entreprises i.e., Groupama Entreprises and DWS Aktien go up and down completely randomly.

Pair Corralation between Groupama Entreprises and DWS Aktien

Assuming the 90 days trading horizon Groupama Entreprises N is expected to generate 0.01 times more return on investment than DWS Aktien. However, Groupama Entreprises N is 78.54 times less risky than DWS Aktien. It trades about 0.98 of its potential returns per unit of risk. DWS Aktien Strategie is currently generating about 0.01 per unit of risk. If you would invest  58,420  in Groupama Entreprises N on September 23, 2024 and sell it today you would earn a total of  981.00  from holding Groupama Entreprises N or generate 1.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.35%
Values	Daily Returns

Groupama Entreprises N  vs.  DWS Aktien Strategie

Groupama Entreprises

Risk-Adjusted Performance

78 of 100

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Groupama Entreprises N are ranked lower than 78 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Groupama Entreprises 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

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DWS Aktien Strategie are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, DWS Aktien is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Groupama Entreprises and DWS Aktien

The main advantage of trading using opposite Groupama Entreprises and DWS Aktien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groupama Entreprises 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 Groupama Entreprises N 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.