Correlation Between Swan Defined and Deutsche Health

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

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

Diversification Opportunities for Swan Defined and Deutsche Health

-0.16

Correlation Coefficient

Swan Defined  Deutsche Health

Good diversification

The 3 months correlation between Swan and Deutsche is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk and Deutsche Health And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Health And and Swan Defined 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 Swan Defined Risk are associated (or correlated) with Deutsche Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Health And has no effect on the direction of Swan Defined i.e., Swan Defined and Deutsche Health go up and down completely randomly.

Pair Corralation between Swan Defined and Deutsche Health

Assuming the 90 days horizon Swan Defined Risk is expected to generate 0.06 times more return on investment than Deutsche Health. However, Swan Defined Risk is 17.64 times less risky than Deutsche Health. It trades about -0.43 of its potential returns per unit of risk. Deutsche Health And is currently generating about -0.07 per unit of risk. If you would invest  893.00  in Swan Defined Risk on December 22, 2024 and sell it today you would lose (2.00) from holding Swan Defined Risk or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.55%
Values	Daily Returns

Swan Defined Risk  vs.  Deutsche Health And

Swan Defined Risk

Risk-Adjusted Performance

Modest

Over the last 90 days Swan Defined Risk has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Swan Defined is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Deutsche Health And

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Health And are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Deutsche Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Swan Defined and Deutsche Health

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

The idea behind Swan Defined Risk and Deutsche Health 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.