Correlation Between Deutsche Health and American Beacon
Can any of the company-specific risk be diversified away by investing in both Deutsche Health and American Beacon 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 Health and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Health And and American Beacon Shapiro, you can compare the effects of market volatilities on Deutsche Health and American Beacon 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 Health with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Health and American Beacon.
Diversification Opportunities for Deutsche Health and American Beacon
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and American is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Health And and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro and Deutsche Health 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 Health And are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Deutsche Health i.e., Deutsche Health and American Beacon go up and down completely randomly.
Pair Corralation between Deutsche Health and American Beacon
Assuming the 90 days horizon Deutsche Health And is expected to generate 0.88 times more return on investment than American Beacon. However, Deutsche Health And is 1.13 times less risky than American Beacon. It trades about 0.18 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about 0.16 per unit of risk. If you would invest 4,119 in Deutsche Health And on October 25, 2024 and sell it today you would earn a total of 103.00 from holding Deutsche Health And or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Health And vs. American Beacon Shapiro
Performance |
| Timeline |
| Deutsche Health And |
| American Beacon Shapiro |
Deutsche Health and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Health and American Beacon
The main advantage of trading using opposite Deutsche Health and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Health position performs unexpectedly, American Beacon 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 Beacon will offset losses from the drop in American Beacon's long position.| Deutsche Health vs. Artisan Select Equity | Deutsche Health vs. Dreyfusstandish Global Fixed | Deutsche Health vs. Doubleline Core Fixed | Deutsche Health vs. Quantitative Longshort Equity |
| American Beacon vs. Goldman Sachs Technology | American Beacon vs. Blackrock Science Technology | American Beacon vs. Blackrock Science Technology | American Beacon vs. Firsthand Technology Opportunities |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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