Correlation Between Deutsche Multi and American Funds
Can any of the company-specific risk be diversified away by investing in both Deutsche Multi and American Funds 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 Multi and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Multi Asset Moderate and American Funds 2010, you can compare the effects of market volatilities on Deutsche Multi and American Funds 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 Multi with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi and American Funds.
Diversification Opportunities for Deutsche Multi and American Funds
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Deutsche and American is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Moderate and American Funds 2010 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2010 and Deutsche Multi 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 Multi Asset Moderate are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2010 has no effect on the direction of Deutsche Multi i.e., Deutsche Multi and American Funds go up and down completely randomly.
Pair Corralation between Deutsche Multi and American Funds
Assuming the 90 days horizon Deutsche Multi Asset Moderate is expected to generate 1.84 times more return on investment than American Funds. However, Deutsche Multi is 1.84 times more volatile than American Funds 2010. It trades about 0.09 of its potential returns per unit of risk. American Funds 2010 is currently generating about 0.16 per unit of risk. If you would invest 975.00 in Deutsche Multi Asset Moderate on September 13, 2024 and sell it today you would earn a total of 62.00 from holding Deutsche Multi Asset Moderate or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Multi Asset Moderate vs. American Funds 2010
Performance |
| Timeline |
| Deutsche Multi Asset |
| American Funds 2010 |
Deutsche Multi and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Multi and American Funds
The main advantage of trading using opposite Deutsche Multi and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Multi position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Deutsche Multi vs. Deutsche Gnma Fund | Deutsche Multi vs. Deutsche Short Term Municipal | Deutsche Multi vs. Deutsche Short Term Municipal | Deutsche Multi vs. Deutsche Science And |
| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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