Correlation Between DWS Municipal and Azimut Holding
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Azimut Holding 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 DWS Municipal and Azimut Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and Azimut Holding SpA, you can compare the effects of market volatilities on DWS Municipal and Azimut Holding 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 DWS Municipal with a short position of Azimut Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Azimut Holding.
Diversification Opportunities for DWS Municipal and Azimut Holding
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between DWS and Azimut is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding SpA and DWS Municipal 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 DWS Municipal Income are associated (or correlated) with Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of DWS Municipal i.e., DWS Municipal and Azimut Holding go up and down completely randomly.
Pair Corralation between DWS Municipal and Azimut Holding
Considering the 90-day investment horizon DWS Municipal is expected to generate 19.2 times less return on investment than Azimut Holding. But when comparing it to its historical volatility, DWS Municipal Income is 6.16 times less risky than Azimut Holding. It trades about 0.09 of its potential returns per unit of risk. Azimut Holding SpA is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,392 in Azimut Holding SpA on October 29, 2024 and sell it today you would earn a total of 411.00 from holding Azimut Holding SpA or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DWS Municipal Income vs. Azimut Holding SpA
Performance |
| Timeline |
| DWS Municipal Income |
| Azimut Holding SpA |
DWS Municipal and Azimut Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DWS Municipal and Azimut Holding
The main advantage of trading using opposite DWS Municipal and Azimut Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Azimut Holding 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 Azimut Holding will offset losses from the drop in Azimut Holding's long position.| DWS Municipal vs. Carlyle Group | DWS Municipal vs. Blue Owl Capital | DWS Municipal vs. TPG Inc | DWS Municipal vs. Patria Investments |
| Azimut Holding vs. Starfleet Innotech | Azimut Holding vs. Flow Capital Corp | Azimut Holding vs. Ameritrans Capital Corp | Azimut Holding vs. Blackhawk Growth Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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