Correlation Between Deutsche Real and Aig Government
Can any of the company-specific risk be diversified away by investing in both Deutsche Real and Aig Government 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 Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Deutsche Real and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Real and Aig Government.
Diversification Opportunities for Deutsche Real and Aig Government
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Deutsche and Aig is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Real Estate and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Deutsche Real i.e., Deutsche Real and Aig Government go up and down completely randomly.
Pair Corralation between Deutsche Real and Aig Government
Assuming the 90 days horizon Deutsche Real Estate is expected to generate 5.57 times more return on investment than Aig Government. However, Deutsche Real is 5.57 times more volatile than Aig Government Money. It trades about 0.09 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.04 per unit of risk. If you would invest 1,949 in Deutsche Real Estate on September 2, 2024 and sell it today you would earn a total of 441.00 from holding Deutsche Real Estate or generate 22.63% 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. Aig Government Money
Performance |
| Timeline |
| Deutsche Real Estate |
| Aig Government Money |
Deutsche Real and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Real and Aig Government
The main advantage of trading using opposite Deutsche Real and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Real position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Deutsche Real vs. T Rowe Price | Deutsche Real vs. Omni Small Cap Value | Deutsche Real vs. Growth Opportunities Fund | Deutsche Real vs. Eic Value Fund |
| Aig Government vs. Artisan Thematic Fund | Aig Government vs. Growth Opportunities Fund | Aig Government vs. Volumetric Fund Volumetric | Aig Government vs. Small Cap 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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