Correlation Between Balanced Fund and Deutsche Global

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

By analyzing existing cross correlation between Balanced Fund Retail and Deutsche Global Real, you can compare the effects of market volatilities on Balanced Fund and Deutsche Global 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 Balanced Fund with a short position of Deutsche Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Deutsche Global.

Diversification Opportunities for Balanced Fund and Deutsche Global

0.36

Correlation Coefficient

Balanced Fund  Deutsche Global

Weak diversification

The 3 months correlation between Balanced and Deutsche is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail and Deutsche Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Global Real and Balanced Fund 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 Balanced Fund Retail are associated (or correlated) with Deutsche Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Global Real has no effect on the direction of Balanced Fund i.e., Balanced Fund and Deutsche Global go up and down completely randomly.

Pair Corralation between Balanced Fund and Deutsche Global

Assuming the 90 days horizon Balanced Fund Retail is expected to under-perform the Deutsche Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Balanced Fund Retail is 1.31 times less risky than Deutsche Global. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Deutsche Global Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  695.00  in Deutsche Global Real on December 28, 2024 and sell it today you would earn a total of  12.00  from holding Deutsche Global Real or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Balanced Fund Retail  vs.  Deutsche Global Real

Balanced Fund Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Balanced Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Balanced Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Deutsche Global Real

Risk-Adjusted Performance

Weak

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

Pair Trading with Balanced Fund and Deutsche Global

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

The idea behind Balanced Fund Retail and Deutsche Global Real 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.