Correlation Between Deutsche Gold and Shenkman Short

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

By analyzing existing cross correlation between Deutsche Gold Precious and Shenkman Short Duration, you can compare the effects of market volatilities on Deutsche Gold and Shenkman Short 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 Gold with a short position of Shenkman Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Gold and Shenkman Short.

Diversification Opportunities for Deutsche Gold and Shenkman Short

-0.49

Correlation Coefficient

Deutsche Gold  Shenkman Short

Very good diversification

The 3 months correlation between Deutsche and Shenkman is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Gold Precious and Shenkman Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenkman Short Duration and Deutsche Gold 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 Gold Precious are associated (or correlated) with Shenkman Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenkman Short Duration has no effect on the direction of Deutsche Gold i.e., Deutsche Gold and Shenkman Short go up and down completely randomly.

Pair Corralation between Deutsche Gold and Shenkman Short

Assuming the 90 days horizon Deutsche Gold Precious is expected to under-perform the Shenkman Short. In addition to that, Deutsche Gold is 11.1 times more volatile than Shenkman Short Duration. It trades about -0.17 of its total potential returns per unit of risk. Shenkman Short Duration is currently generating about -0.2 per unit of volatility. If you would invest  987.00  in Shenkman Short Duration on October 12, 2024 and sell it today you would lose (6.00) from holding Shenkman Short Duration or give up 0.61% of portfolio value over 90 days.

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

Deutsche Gold Precious  vs.  Shenkman Short Duration

Deutsche Gold Precious

Risk-Adjusted Performance

0 of 100

Very Weak

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

Shenkman Short Duration

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Shenkman Short Duration are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Shenkman Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deutsche Gold and Shenkman Short

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

The idea behind Deutsche Gold Precious and Shenkman Short Duration 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.