Correlation Between Deutsche Multi-asset and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Deutsche Multi-asset and Dow Jones 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 Multi-asset and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Multi Asset Servative and Dow Jones Industrial, you can compare the effects of market volatilities on Deutsche Multi-asset and Dow Jones 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 Multi-asset with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi-asset and Dow Jones.
Diversification Opportunities for Deutsche Multi-asset and Dow Jones
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Dow is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Servative and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Deutsche Multi-asset 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 Multi Asset Servative are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Deutsche Multi-asset i.e., Deutsche Multi-asset and Dow Jones go up and down completely randomly.
Pair Corralation between Deutsche Multi-asset and Dow Jones
Assuming the 90 days horizon Deutsche Multi Asset Servative is expected to generate 0.52 times more return on investment than Dow Jones. However, Deutsche Multi Asset Servative is 1.91 times less risky than Dow Jones. It trades about -0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.04 per unit of risk. If you would invest 1,290 in Deutsche Multi Asset Servative on December 29, 2024 and sell it today you would lose (8.00) from holding Deutsche Multi Asset Servative or give up 0.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Deutsche Multi Asset Servative vs. Dow Jones Industrial
Performance |
Timeline |
Deutsche Multi-asset and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Deutsche Multi Asset Servative
Pair trading matchups for Deutsche Multi-asset
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Deutsche Multi-asset and Dow Jones
The main advantage of trading using opposite Deutsche Multi-asset and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Multi-asset position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Deutsche Multi-asset vs. Rreef Property Trust | Deutsche Multi-asset vs. Nomura Real Estate | Deutsche Multi-asset vs. Vanguard Reit Index | Deutsche Multi-asset vs. Franklin Real Estate |
Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Falcon Metals Limited | Dow Jones vs. Broadstone Net Lease | Dow Jones vs. PennantPark Investment |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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