Correlation Between Absolute Convertible and Dws Money

Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Dws Money 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 Absolute Convertible and Dws Money into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Absolute Convertible Arbitrage and Dws Money Market, you can compare the effects of market volatilities on Absolute Convertible and Dws Money 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 Absolute Convertible with a short position of Dws Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Dws Money.

Diversification Opportunities for Absolute Convertible and Dws Money

0.64

Correlation Coefficient

Absolute Convertible  Dws Money

Poor diversification

The 3 months correlation between Absolute and Dws is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Dws Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Money Market and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Dws Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Money Market has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Dws Money go up and down completely randomly.

Pair Corralation between Absolute Convertible and Dws Money

Assuming the 90 days horizon Absolute Convertible is expected to generate 2.73 times less return on investment than Dws Money. In addition to that, Absolute Convertible is 1.39 times more volatile than Dws Money Market. It trades about 0.03 of its total potential returns per unit of risk. Dws Money Market is currently generating about 0.12 per unit of volatility. If you would invest  99.00  in Dws Money Market on September 16, 2024 and sell it today you would earn a total of  1.00  from holding Dws Money Market or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Absolute Convertible Arbitrage  vs.  Dws Money Market

Absolute Convertible

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Absolute Convertible Arbitrage are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Absolute Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dws Money Market

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dws Money Market are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Dws Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Absolute Convertible and Dws Money

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

The idea behind Absolute Convertible Arbitrage and Dws Money Market 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.