Correlation Between Deka STOXX and Deka Deutsche

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

By analyzing existing cross correlation between Deka STOXX Europe and Deka Deutsche Brse, you can compare the effects of market volatilities on Deka STOXX and Deka Deutsche 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 Deka STOXX with a short position of Deka Deutsche. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deka STOXX and Deka Deutsche.

Diversification Opportunities for Deka STOXX and Deka Deutsche

0.0

Correlation Coefficient

Deka STOXX  Deka Deutsche

Pay attention - limited upside

The 3 months correlation between Deka and Deka is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Deka STOXX Europe and Deka Deutsche Brse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deka Deutsche Brse and Deka STOXX 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 Deka STOXX Europe are associated (or correlated) with Deka Deutsche. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deka Deutsche Brse has no effect on the direction of Deka STOXX i.e., Deka STOXX and Deka Deutsche go up and down completely randomly.

Pair Corralation between Deka STOXX and Deka Deutsche

If you would invest  0.00  in Deka STOXX Europe on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Deka STOXX Europe or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Deka STOXX Europe  vs.  Deka Deutsche Brse

Deka STOXX Europe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deka STOXX Europe has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Deka STOXX is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Deka Deutsche Brse

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Deka Deutsche Brse are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Deka Deutsche is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Deka STOXX and Deka Deutsche

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

The idea behind Deka STOXX Europe and Deka Deutsche Brse 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.