Correlation Between Dws Emerging and Commodities Strategy

Can any of the company-specific risk be diversified away by investing in both Dws Emerging and Commodities Strategy 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 Dws Emerging and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dws Emerging Markets and Commodities Strategy Fund, you can compare the effects of market volatilities on Dws Emerging and Commodities Strategy 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 Dws Emerging with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Emerging and Commodities Strategy.

Diversification Opportunities for Dws Emerging and Commodities Strategy

-0.5

Correlation Coefficient

Dws Emerging  Commodities Strategy

Very good diversification

The 3 months correlation between Dws and Commodities is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dws Emerging Markets and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and Dws Emerging 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 Dws Emerging Markets are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Dws Emerging i.e., Dws Emerging and Commodities Strategy go up and down completely randomly.

Pair Corralation between Dws Emerging and Commodities Strategy

Assuming the 90 days horizon Dws Emerging Markets is expected to generate 0.95 times more return on investment than Commodities Strategy. However, Dws Emerging Markets is 1.05 times less risky than Commodities Strategy. It trades about 0.05 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.04 per unit of risk. If you would invest  1,665  in Dws Emerging Markets on October 22, 2024 and sell it today you would earn a total of  173.00  from holding Dws Emerging Markets or generate 10.39% return on investment over 90 days.

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

Dws Emerging Markets  vs.  Commodities Strategy Fund

Dws Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Commodities Strategy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Commodities Strategy Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Commodities Strategy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Dws Emerging and Commodities Strategy

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

The idea behind Dws Emerging Markets and Commodities Strategy Fund 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.