Correlation Between BGF Euro and DWS Aktien
Can any of the company-specific risk be diversified away by investing in both BGF Euro and DWS Aktien 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 BGF Euro and DWS Aktien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Euro Markets and DWS Aktien Strategie, you can compare the effects of market volatilities on BGF Euro and DWS Aktien 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 BGF Euro with a short position of DWS Aktien. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Euro and DWS Aktien.
Diversification Opportunities for BGF Euro and DWS Aktien
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BGF and DWS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding BGF Euro Markets and DWS Aktien Strategie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS Aktien Strategie and BGF Euro 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 BGF Euro Markets are associated (or correlated) with DWS Aktien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS Aktien Strategie has no effect on the direction of BGF Euro i.e., BGF Euro and DWS Aktien go up and down completely randomly.
Pair Corralation between BGF Euro and DWS Aktien
Assuming the 90 days trading horizon BGF Euro Markets is expected to generate 1.12 times more return on investment than DWS Aktien. However, BGF Euro is 1.12 times more volatile than DWS Aktien Strategie. It trades about 0.31 of its potential returns per unit of risk. DWS Aktien Strategie is currently generating about 0.31 per unit of risk. If you would invest 4,486 in BGF Euro Markets on October 20, 2024 and sell it today you would earn a total of 206.00 from holding BGF Euro Markets or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Euro Markets vs. DWS Aktien Strategie
Performance |
| Timeline |
| BGF Euro Markets |
| DWS Aktien Strategie |
BGF Euro and DWS Aktien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Euro and DWS Aktien
The main advantage of trading using opposite BGF Euro and DWS Aktien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Euro position performs unexpectedly, DWS Aktien 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 Aktien will offset losses from the drop in DWS Aktien's long position.| BGF Euro vs. Groupama Entreprises N | BGF Euro vs. Renaissance Europe C | BGF Euro vs. Superior Plus Corp | BGF Euro vs. Intel |
| DWS Aktien vs. Groupama Entreprises N | DWS Aktien vs. Renaissance Europe C | DWS Aktien vs. Superior Plus Corp | DWS Aktien vs. Intel |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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