Correlation Between Dws Strategic and DTF Tax

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

By analyzing existing cross correlation between Dws Strategic Municipal and DTF Tax Free, you can compare the effects of market volatilities on Dws Strategic and DTF Tax 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 Dws Strategic with a short position of DTF Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Strategic and DTF Tax.

Diversification Opportunities for Dws Strategic and DTF Tax

0.05

Correlation Coefficient

Dws Strategic  DTF Tax

Significant diversification

The 3 months correlation between Dws and DTF is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dws Strategic Municipal and DTF Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTF Tax Free and Dws Strategic 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 Dws Strategic Municipal are associated (or correlated) with DTF Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTF Tax Free has no effect on the direction of Dws Strategic i.e., Dws Strategic and DTF Tax go up and down completely randomly.

Pair Corralation between Dws Strategic and DTF Tax

If you would invest  1,007  in Dws Strategic Municipal on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Dws Strategic Municipal or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Dws Strategic Municipal  vs.  DTF Tax Free

Dws Strategic Municipal

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Dws Strategic Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of very inconsistent basic indicators, Dws Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

DTF Tax Free

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dws Strategic and DTF Tax

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

The idea behind Dws Strategic Municipal and DTF Tax Free 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.