Correlation Between Destra Multi-alternativ and Destra International

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

By analyzing existing cross correlation between Destra Multi Alternative and Destra International Event Driven, you can compare the effects of market volatilities on Destra Multi-alternativ and Destra International 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 Destra Multi-alternativ with a short position of Destra International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destra Multi-alternativ and Destra International.

Diversification Opportunities for Destra Multi-alternativ and Destra International

0.4

Correlation Coefficient

Destra Multi-alternativ  Destra International

Very weak diversification

The 3 months correlation between Destra and Destra is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Destra Multi Alternative and Destra International Event Dri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destra International and Destra Multi-alternativ 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 Destra Multi Alternative are associated (or correlated) with Destra International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destra International has no effect on the direction of Destra Multi-alternativ i.e., Destra Multi-alternativ and Destra International go up and down completely randomly.

Pair Corralation between Destra Multi-alternativ and Destra International

Assuming the 90 days horizon Destra Multi Alternative is expected to under-perform the Destra International. In addition to that, Destra Multi-alternativ is 1.63 times more volatile than Destra International Event Driven. It trades about -0.11 of its total potential returns per unit of risk. Destra International Event Driven is currently generating about 0.08 per unit of volatility. If you would invest  2,219  in Destra International Event Driven on October 26, 2024 and sell it today you would earn a total of  17.00  from holding Destra International Event Driven or generate 0.77% return on investment over 90 days.

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

Destra Multi Alternative  vs.  Destra International Event Dri

Destra Multi Alternative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Destra International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Destra Multi-alternativ and Destra International

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

The idea behind Destra Multi Alternative and Destra International Event Driven 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.