Correlation Between Deutsche Gnma and Deutsche Multi-asset
Can any of the company-specific risk be diversified away by investing in both Deutsche Gnma and Deutsche Multi-asset 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 Deutsche Gnma and Deutsche Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Gnma Fund and Deutsche Multi Asset Moderate, you can compare the effects of market volatilities on Deutsche Gnma and Deutsche Multi-asset 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 Deutsche Gnma with a short position of Deutsche Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Gnma and Deutsche Multi-asset.
Diversification Opportunities for Deutsche Gnma and Deutsche Multi-asset
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Deutsche and Deutsche is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Gnma Fund and Deutsche Multi Asset Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Multi Asset and Deutsche Gnma 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 Deutsche Gnma Fund are associated (or correlated) with Deutsche Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Multi Asset has no effect on the direction of Deutsche Gnma i.e., Deutsche Gnma and Deutsche Multi-asset go up and down completely randomly.
Pair Corralation between Deutsche Gnma and Deutsche Multi-asset
Assuming the 90 days horizon Deutsche Gnma is expected to generate 3.19 times less return on investment than Deutsche Multi-asset. But when comparing it to its historical volatility, Deutsche Gnma Fund is 1.05 times less risky than Deutsche Multi-asset. It trades about 0.11 of its potential returns per unit of risk. Deutsche Multi Asset Moderate is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,001 in Deutsche Multi Asset Moderate on September 5, 2024 and sell it today you would earn a total of 31.00 from holding Deutsche Multi Asset Moderate or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Gnma Fund vs. Deutsche Multi Asset Moderate
Performance |
| Timeline |
| Deutsche Gnma |
| Deutsche Multi Asset |
Deutsche Gnma and Deutsche Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Gnma and Deutsche Multi-asset
The main advantage of trading using opposite Deutsche Gnma and Deutsche Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Gnma position performs unexpectedly, Deutsche Multi-asset 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 Multi-asset will offset losses from the drop in Deutsche Multi-asset's long position.| Deutsche Gnma vs. Deutsche Short Term Municipal | Deutsche Gnma vs. Deutsche Short Term Municipal | Deutsche Gnma vs. Deutsche Science And | Deutsche Gnma vs. Deutsche Science And |
| Deutsche Multi-asset vs. Deutsche Gnma Fund | Deutsche Multi-asset vs. Deutsche Short Term Municipal | Deutsche Multi-asset vs. Deutsche Short Term Municipal | Deutsche Multi-asset vs. Deutsche Science And |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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