Correlation Between DB Gold and DB Gold

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

By analyzing existing cross correlation between DB Gold Short and DB Gold Double, you can compare the effects of market volatilities on DB Gold and DB Gold 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 DB Gold with a short position of DB Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Gold and DB Gold.

Diversification Opportunities for DB Gold and DB Gold

-0.93

Correlation Coefficient

DB Gold  DB Gold

Pay attention - limited upside

The 3 months correlation between DGZ and DGP is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Short and DB Gold Double in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Gold Double and DB Gold 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 DB Gold Short are associated (or correlated) with DB Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Gold Double has no effect on the direction of DB Gold i.e., DB Gold and DB Gold go up and down completely randomly.

Pair Corralation between DB Gold and DB Gold

Considering the 90-day investment horizon DB Gold Short is expected to under-perform the DB Gold. But the etf apears to be less risky and, when comparing its historical volatility, DB Gold Short is 1.04 times less risky than DB Gold. The etf trades about -0.08 of its potential returns per unit of risk. The DB Gold Double is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  6,722  in DB Gold Double on December 26, 2024 and sell it today you would earn a total of  1,836  from holding DB Gold Double or generate 27.31% return on investment over 90 days.

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

DB Gold Short  vs.  DB Gold Double

DB Gold Short

Risk-Adjusted Performance

Very Weak

Over the last 90 days DB Gold Short has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

DB Gold Double

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DB Gold Double are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, DB Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DB Gold and DB Gold

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

The idea behind DB Gold Short and DB Gold Double 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.