Correlation Between Global Gold and Deutsche Strategic
Can any of the company-specific risk be diversified away by investing in both Global Gold and Deutsche Strategic 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 Global Gold and Deutsche Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Deutsche Strategic High, you can compare the effects of market volatilities on Global Gold and Deutsche Strategic 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 Global Gold with a short position of Deutsche Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Deutsche Strategic.
Diversification Opportunities for Global Gold and Deutsche Strategic
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Deutsche is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Deutsche Strategic High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Strategic High and Global 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 Global Gold Fund are associated (or correlated) with Deutsche Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Strategic High has no effect on the direction of Global Gold i.e., Global Gold and Deutsche Strategic go up and down completely randomly.
Pair Corralation between Global Gold and Deutsche Strategic
Assuming the 90 days horizon Global Gold Fund is expected to under-perform the Deutsche Strategic. In addition to that, Global Gold is 4.99 times more volatile than Deutsche Strategic High. It trades about -0.18 of its total potential returns per unit of risk. Deutsche Strategic High is currently generating about 0.2 per unit of volatility. If you would invest 1,076 in Deutsche Strategic High on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Deutsche Strategic High or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Global Gold Fund vs. Deutsche Strategic High
Performance |
| Timeline |
| Global Gold Fund |
| Deutsche Strategic High |
Global Gold and Deutsche Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Deutsche Strategic
The main advantage of trading using opposite Global Gold and Deutsche Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Deutsche Strategic 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 Strategic will offset losses from the drop in Deutsche Strategic's long position.| Global Gold vs. Legg Mason Partners | Global Gold vs. Federated Ohio Municipal | Global Gold vs. Ambrus Core Bond | Global Gold vs. Oklahoma Municipal Fund |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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