Correlation Between Deutsche Croci and Deutsche Core

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

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

Diversification Opportunities for Deutsche Croci and Deutsche Core

0.95

Correlation Coefficient

Deutsche Croci  Deutsche Core

Almost no diversification

The 3 months correlation between Deutsche and Deutsche is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Croci Equity and Deutsche E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche E Equity and Deutsche Croci 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 Croci Equity are associated (or correlated) with Deutsche Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche E Equity has no effect on the direction of Deutsche Croci i.e., Deutsche Croci and Deutsche Core go up and down completely randomly.

Pair Corralation between Deutsche Croci and Deutsche Core

Assuming the 90 days horizon Deutsche Croci Equity is expected to generate 0.92 times more return on investment than Deutsche Core. However, Deutsche Croci Equity is 1.09 times less risky than Deutsche Core. It trades about -0.32 of its potential returns per unit of risk. Deutsche E Equity is currently generating about -0.32 per unit of risk. If you would invest  5,925  in Deutsche Croci Equity on October 14, 2024 and sell it today you would lose (611.00) from holding Deutsche Croci Equity or give up 10.31% of portfolio value over 90 days.

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

Deutsche Croci Equity  vs.  Deutsche E Equity

Deutsche Croci Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Croci Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Deutsche E Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche E Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Deutsche Croci and Deutsche Core

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

The idea behind Deutsche Croci Equity and Deutsche E Equity 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.