Correlation Between Deutsche Real and First Eagle
Can any of the company-specific risk be diversified away by investing in both Deutsche Real and First Eagle 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 Real and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Real Estate and First Eagle Gold, you can compare the effects of market volatilities on Deutsche Real and First Eagle 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 Real with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Real and First Eagle.
Diversification Opportunities for Deutsche Real and First Eagle
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Deutsche and First is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Real Estate and First Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Gold and Deutsche Real 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 Real Estate are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Gold has no effect on the direction of Deutsche Real i.e., Deutsche Real and First Eagle go up and down completely randomly.
Pair Corralation between Deutsche Real and First Eagle
Assuming the 90 days horizon Deutsche Real Estate is expected to generate 0.72 times more return on investment than First Eagle. However, Deutsche Real Estate is 1.38 times less risky than First Eagle. It trades about 0.05 of its potential returns per unit of risk. First Eagle Gold is currently generating about 0.03 per unit of risk. If you would invest 1,840 in Deutsche Real Estate on September 14, 2024 and sell it today you would earn a total of 455.00 from holding Deutsche Real Estate or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Real Estate vs. First Eagle Gold
Performance |
| Timeline |
| Deutsche Real Estate |
| First Eagle Gold |
Deutsche Real and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Real and First Eagle
The main advantage of trading using opposite Deutsche Real and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Real position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Deutsche Real vs. Realty Income | Deutsche Real vs. Dynex Capital | Deutsche Real vs. First Industrial Realty | Deutsche Real vs. Healthcare Realty Trust |
| First Eagle vs. Deutsche Real Estate | First Eagle vs. Tiaa Cref Real Estate | First Eagle vs. Dunham Real Estate | First Eagle vs. Amg Managers Centersquare |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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