Correlation Between Growth Fund and Dws Equity
Can any of the company-specific risk be diversified away by investing in both Growth Fund and Dws Equity 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 Growth Fund and Dws Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Dws Equity Sector, you can compare the effects of market volatilities on Growth Fund and Dws Equity 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 Growth Fund with a short position of Dws Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Dws Equity.
Diversification Opportunities for Growth Fund and Dws Equity
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Growth and Dws is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Dws Equity Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Equity Sector and Growth Fund 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 Growth Fund Of are associated (or correlated) with Dws Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Equity Sector has no effect on the direction of Growth Fund i.e., Growth Fund and Dws Equity go up and down completely randomly.
Pair Corralation between Growth Fund and Dws Equity
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.55 times more return on investment than Dws Equity. However, Growth Fund is 1.55 times more volatile than Dws Equity Sector. It trades about 0.17 of its potential returns per unit of risk. Dws Equity Sector is currently generating about 0.21 per unit of risk. If you would invest 7,573 in Growth Fund Of on November 4, 2024 and sell it today you would earn a total of 258.00 from holding Growth Fund Of or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Dws Equity Sector
Performance |
| Timeline |
| Growth Fund |
| Dws Equity Sector |
Growth Fund and Dws Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Dws Equity
The main advantage of trading using opposite Growth Fund and Dws Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, Dws Equity 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 Equity will offset losses from the drop in Dws Equity's long position.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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