Correlation Between Deutsche Gnma and Deutsche Real

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

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

Diversification Opportunities for Deutsche Gnma and Deutsche Real

0.58

Correlation Coefficient

Deutsche Gnma  Deutsche Real

Very weak diversification

The 3 months correlation between Deutsche and Deutsche is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Gnma Fund and Deutsche Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Real Assets and Deutsche Gnma 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 Deutsche Gnma Fund are associated (or correlated) with Deutsche Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Real Assets has no effect on the direction of Deutsche Gnma i.e., Deutsche Gnma and Deutsche Real go up and down completely randomly.

Pair Corralation between Deutsche Gnma and Deutsche Real

Assuming the 90 days horizon Deutsche Gnma Fund is expected to under-perform the Deutsche Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Deutsche Gnma Fund is 1.44 times less risky than Deutsche Real. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Deutsche Real Assets is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,246  in Deutsche Real Assets on September 17, 2024 and sell it today you would lose (34.00) from holding Deutsche Real Assets or give up 2.73% of portfolio value over 90 days.

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

Deutsche Gnma Fund  vs.  Deutsche Real Assets

Deutsche Gnma

Risk-Adjusted Performance

0 of 100

Very Weak

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

Deutsche Real Assets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Deutsche Gnma and Deutsche Real

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

The idea behind Deutsche Gnma Fund and Deutsche Real Assets 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.