Correlation Between Deutsche Health and Ivy Small

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

By analyzing existing cross correlation between Deutsche Health And and Ivy Small Cap, you can compare the effects of market volatilities on Deutsche Health and Ivy Small 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 Health with a short position of Ivy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Health and Ivy Small.

Diversification Opportunities for Deutsche Health and Ivy Small

0.44

Correlation Coefficient

Deutsche Health  Ivy Small

Very weak diversification

The 3 months correlation between Deutsche and IVY is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Health And and Ivy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Small Cap and Deutsche Health 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 Health And are associated (or correlated) with Ivy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Small Cap has no effect on the direction of Deutsche Health i.e., Deutsche Health and Ivy Small go up and down completely randomly.

Pair Corralation between Deutsche Health and Ivy Small

Assuming the 90 days horizon Deutsche Health And is expected to generate 0.48 times more return on investment than Ivy Small. However, Deutsche Health And is 2.09 times less risky than Ivy Small. It trades about 0.01 of its potential returns per unit of risk. Ivy Small Cap is currently generating about 0.0 per unit of risk. If you would invest  4,021  in Deutsche Health And on October 5, 2024 and sell it today you would earn a total of  38.00  from holding Deutsche Health And or generate 0.95% return on investment over 90 days.

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

Deutsche Health And  vs.  Ivy Small Cap

Deutsche Health And

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ivy Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 Health and Ivy Small

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

The idea behind Deutsche Health And and Ivy Small Cap 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.