Correlation Between Deutsche Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Deutsche Global and Western 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 Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Global Income and Western Asset Diversified, you can compare the effects of market volatilities on Deutsche Global and Western 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 Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Global and Western Asset.
Diversification Opportunities for Deutsche Global and Western Asset
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Deutsche and Western is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Global Income and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified and Deutsche Global 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 Global Income are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Diversified has no effect on the direction of Deutsche Global i.e., Deutsche Global and Western Asset go up and down completely randomly.
Pair Corralation between Deutsche Global and Western Asset
Assuming the 90 days horizon Deutsche Global Income is expected to generate 1.36 times more return on investment than Western Asset. However, Deutsche Global is 1.36 times more volatile than Western Asset Diversified. It trades about 0.15 of its potential returns per unit of risk. Western Asset Diversified is currently generating about 0.11 per unit of risk. If you would invest 1,012 in Deutsche Global Income on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Deutsche Global Income or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Deutsche Global Income vs. Western Asset Diversified
Performance |
| Timeline |
| Deutsche Global Income |
| Western Asset Diversified |
Deutsche Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Global and Western Asset
The main advantage of trading using opposite Deutsche Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Global position performs unexpectedly, Western 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 Western Asset will offset losses from the drop in Western Asset's long position.| Deutsche Global vs. Deutsche Gnma Fund | Deutsche Global vs. Deutsche Short Term Municipal | Deutsche Global vs. Deutsche Short Term Municipal | Deutsche Global vs. Deutsche Science And |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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