Correlation Between DSJA and DB Gold
Can any of the company-specific risk be diversified away by investing in both DSJA and DB Gold 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 DSJA and DB Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and DB Gold Short, you can compare the effects of market volatilities on DSJA and DB Gold 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 DSJA with a short position of DB Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and DB Gold.
Diversification Opportunities for DSJA and DB Gold
Excellent diversification
The 3 months correlation between DSJA and DGZ is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and DB Gold Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Gold Short and DSJA 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 DSJA are associated (or correlated) with DB Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Gold Short has no effect on the direction of DSJA i.e., DSJA and DB Gold go up and down completely randomly.
Pair Corralation between DSJA and DB Gold
If you would invest 806.00 in DB Gold Short on August 28, 2024 and sell it today you would earn a total of 31.00 from holding DB Gold Short or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
DSJA vs. DB Gold Short
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DB Gold Short |
DSJA and DB Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and DB Gold
The main advantage of trading using opposite DSJA and DB Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA position performs unexpectedly, DB Gold 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 DB Gold will offset losses from the drop in DB Gold's long position.The idea behind DSJA and DB Gold Short 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.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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