Correlation Between STF Tactical and DWS

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

By analyzing existing cross correlation between STF Tactical Growth and DWS, you can compare the effects of market volatilities on STF Tactical and DWS 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 STF Tactical with a short position of DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of STF Tactical and DWS.

Diversification Opportunities for STF Tactical and DWS

0.56

Correlation Coefficient

STF Tactical  DWS

Very weak diversification

The 3 months correlation between STF and DWS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding STF Tactical Growth and DWS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS and STF Tactical 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 STF Tactical Growth are associated (or correlated) with DWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS has no effect on the direction of STF Tactical i.e., STF Tactical and DWS go up and down completely randomly.

Pair Corralation between STF Tactical and DWS

If you would invest  3,489  in STF Tactical Growth on September 15, 2024 and sell it today you would earn a total of  121.00  from holding STF Tactical Growth or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

STF Tactical Growth  vs.  DWS

STF Tactical Growth

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STF Tactical Growth are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, STF Tactical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

DWS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DWS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, DWS is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with STF Tactical and DWS

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

The idea behind STF Tactical Growth and DWS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.