Correlation Between ALM ES and DWS Aktien

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

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

Diversification Opportunities for ALM ES and DWS Aktien

-0.15

Correlation Coefficient

ALM ES  DWS Aktien

Good diversification

The 3 months correlation between ALM and DWS is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ALM ES Actions 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 ALM ES 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 ALM ES Actions 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 ALM ES i.e., ALM ES and DWS Aktien go up and down completely randomly.

Pair Corralation between ALM ES and DWS Aktien

Assuming the 90 days trading horizon ALM ES Actions is expected to under-perform the DWS Aktien. But the fund apears to be less risky and, when comparing its historical volatility, ALM ES Actions is 1.26 times less risky than DWS Aktien. The fund trades about -0.13 of its potential returns per unit of risk. The DWS Aktien Strategie is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  50,174  in DWS Aktien Strategie on December 21, 2024 and sell it today you would earn a total of  7,868  from holding DWS Aktien Strategie or generate 15.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

ALM ES Actions  vs.  DWS Aktien Strategie

ALM ES Actions

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALM ES Actions has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

DWS Aktien Strategie

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DWS Aktien Strategie are ranked lower than 18 (%) 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 ALM ES and DWS Aktien

The main advantage of trading using opposite ALM ES and DWS Aktien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALM ES 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 ALM ES Actions 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.