Correlation Between Deutsche Multi-asset and Horizon Spin

Can any of the company-specific risk be diversified away by investing in both Deutsche Multi-asset and Horizon Spin 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 Horizon Spin 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 Horizon Spin Off And, you can compare the effects of market volatilities on Deutsche Multi-asset and Horizon Spin 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 Horizon Spin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi-asset and Horizon Spin.

Diversification Opportunities for Deutsche Multi-asset and Horizon Spin

-0.53

Correlation Coefficient

Deutsche Multi-asset  Horizon Spin

Excellent diversification

The 3 months correlation between Deutsche and Horizon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Moderate and Horizon Spin Off And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Spin Off 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 Horizon Spin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Spin Off has no effect on the direction of Deutsche Multi-asset i.e., Deutsche Multi-asset and Horizon Spin go up and down completely randomly.

Pair Corralation between Deutsche Multi-asset and Horizon Spin

Assuming the 90 days horizon Deutsche Multi-asset is expected to generate 36.08 times less return on investment than Horizon Spin. But when comparing it to its historical volatility, Deutsche Multi Asset Moderate is 4.24 times less risky than Horizon Spin. It trades about 0.01 of its potential returns per unit of risk. Horizon Spin Off And is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,243  in Horizon Spin Off And on December 29, 2024 and sell it today you would earn a total of  417.00  from holding Horizon Spin Off And or generate 12.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Deutsche Multi Asset Moderate  vs.  Horizon Spin Off And

Deutsche Multi Asset

Risk-Adjusted Performance

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 fairly strong basic indicators, Deutsche Multi-asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Horizon Spin Off

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Spin Off And are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Horizon Spin showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Multi-asset and Horizon Spin

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

The idea behind Deutsche Multi Asset Moderate and Horizon Spin Off And 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.