Correlation Between Deutsche Multi-asset and Pioneer Solutions

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

By analyzing existing cross correlation between Deutsche Multi Asset Moderate and Pioneer Solutions , you can compare the effects of market volatilities on Deutsche Multi-asset and Pioneer Solutions 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 Multi-asset with a short position of Pioneer Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi-asset and Pioneer Solutions.

Diversification Opportunities for Deutsche Multi-asset and Pioneer Solutions

0.85

Correlation Coefficient

Deutsche Multi-asset  Pioneer Solutions

Very poor diversification

The 3 months correlation between Deutsche and Pioneer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Moderate and Pioneer Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Solutions and Deutsche Multi-asset 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 Multi Asset Moderate are associated (or correlated) with Pioneer Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Solutions has no effect on the direction of Deutsche Multi-asset i.e., Deutsche Multi-asset and Pioneer Solutions go up and down completely randomly.

Pair Corralation between Deutsche Multi-asset and Pioneer Solutions

Assuming the 90 days horizon Deutsche Multi Asset Moderate is expected to under-perform the Pioneer Solutions. In addition to that, Deutsche Multi-asset is 5.09 times more volatile than Pioneer Solutions . It trades about -0.13 of its total potential returns per unit of risk. Pioneer Solutions is currently generating about -0.16 per unit of volatility. If you would invest  1,240  in Pioneer Solutions on October 4, 2024 and sell it today you would lose (92.00) from holding Pioneer Solutions or give up 7.42% of portfolio value over 90 days.

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

Deutsche Multi Asset Moderate  vs.  Pioneer Solutions

Deutsche Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Multi Asset Moderate has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pioneer Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneer Solutions 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 Multi-asset and Pioneer Solutions

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

The idea behind Deutsche Multi Asset Moderate and Pioneer Solutions 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.