Correlation Between KAUFMAN ET and Deutsche Wohnen
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By analyzing existing cross correlation between KAUFMAN ET BROAD and Deutsche Wohnen SE, you can compare the effects of market volatilities on KAUFMAN ET and Deutsche Wohnen 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 KAUFMAN ET with a short position of Deutsche Wohnen. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Deutsche Wohnen.
Diversification Opportunities for KAUFMAN ET and Deutsche Wohnen
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAUFMAN and Deutsche is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and Deutsche Wohnen SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Wohnen SE and KAUFMAN ET 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 KAUFMAN ET BROAD are associated (or correlated) with Deutsche Wohnen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Wohnen SE has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and Deutsche Wohnen go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Deutsche Wohnen
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to generate 0.9 times more return on investment than Deutsche Wohnen. However, KAUFMAN ET BROAD is 1.12 times less risky than Deutsche Wohnen. It trades about 0.05 of its potential returns per unit of risk. Deutsche Wohnen SE is currently generating about 0.03 per unit of risk. If you would invest 2,225 in KAUFMAN ET BROAD on September 12, 2024 and sell it today you would earn a total of 935.00 from holding KAUFMAN ET BROAD or generate 42.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Deutsche Wohnen SE
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Deutsche Wohnen SE |
KAUFMAN ET and Deutsche Wohnen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Deutsche Wohnen
The main advantage of trading using opposite KAUFMAN ET and Deutsche Wohnen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET position performs unexpectedly, Deutsche Wohnen 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 Deutsche Wohnen will offset losses from the drop in Deutsche Wohnen's long position.The idea behind KAUFMAN ET BROAD and Deutsche Wohnen SE 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.| Deutsche Wohnen vs. LANDSEA HOMES P | Deutsche Wohnen vs. Superior Plus Corp | Deutsche Wohnen vs. SIVERS SEMICONDUCTORS AB | Deutsche Wohnen vs. NorAm Drilling AS |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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