Correlation Between Deutsche Capital and Black Oak

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Can any of the company-specific risk be diversified away by investing in both Deutsche Capital and Black Oak 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 Capital and Black Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Capital Growth and Black Oak Emerging, you can compare the effects of market volatilities on Deutsche Capital and Black Oak 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 Capital with a short position of Black Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Capital and Black Oak.

Diversification Opportunities for Deutsche Capital and Black Oak

DeutscheBlackDiversified AwayDeutscheBlackDiversified Away100%
0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Deutsche and Black is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Capital Growth and Black Oak Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Oak Emerging and Deutsche Capital 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 Capital Growth are associated (or correlated) with Black Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Oak Emerging has no effect on the direction of Deutsche Capital i.e., Deutsche Capital and Black Oak go up and down completely randomly.

Pair Corralation between Deutsche Capital and Black Oak

Assuming the 90 days horizon Deutsche Capital Growth is expected to generate 0.95 times more return on investment than Black Oak. However, Deutsche Capital Growth is 1.05 times less risky than Black Oak. It trades about -0.01 of its potential returns per unit of risk. Black Oak Emerging is currently generating about -0.04 per unit of risk. If you would invest  13,082  in Deutsche Capital Growth on October 25, 2024 and sell it today you would lose (260.00) from holding Deutsche Capital Growth or give up 1.99% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Deutsche Capital Growth  vs.  Black Oak Emerging

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-505
JavaScript chart by amCharts 3.21.15SCGSX BOGSX
       Timeline  
Deutsche Capital Growth 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Deutsche Capital Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Deutsche Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan125130135140
Black Oak Emerging 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Black Oak Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Black Oak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan7.27.47.67.888.28.4

Deutsche Capital and Black Oak Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.35-1.77-1.19-0.61-0.03920.531.111.692.272.85 0.080.100.120.140.160.18
JavaScript chart by amCharts 3.21.15SCGSX BOGSX
       Returns  

Pair Trading with Deutsche Capital and Black Oak

The main advantage of trading using opposite Deutsche Capital and Black Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Capital position performs unexpectedly, Black Oak 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 Black Oak will offset losses from the drop in Black Oak's long position.
The idea behind Deutsche Capital Growth and Black Oak Emerging 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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