Correlation Between FF European and DWS Aktien

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

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

Diversification Opportunities for FF European and DWS Aktien

0.14

Correlation Coefficient

FF European  DWS Aktien

Average diversification

The 3 months correlation between FJ2B and DWS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FF European 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 FF European 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 FF European 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 FF European i.e., FF European and DWS Aktien go up and down completely randomly.

Pair Corralation between FF European and DWS Aktien

Assuming the 90 days trading horizon FF European is expected to generate 0.97 times more return on investment than DWS Aktien. However, FF European is 1.03 times less risky than DWS Aktien. It trades about -0.03 of its potential returns per unit of risk. DWS Aktien Strategie is currently generating about -0.08 per unit of risk. If you would invest  2,013  in FF European on October 12, 2024 and sell it today you would lose (8.00) from holding FF European or give up 0.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

FF European  vs.  DWS Aktien Strategie

FF European

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FF European are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, FF European is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

DWS Aktien Strategie

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DWS Aktien Strategie has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, DWS Aktien is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FF European and DWS Aktien

The main advantage of trading using opposite FF European and DWS Aktien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FF European 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 FF European 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.