Correlation Between Deutsche Emerging and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Deutsche Emerging and Dow Jones 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 Emerging and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Emerging Markets and Dow Jones Industrial, you can compare the effects of market volatilities on Deutsche Emerging and Dow Jones 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 Emerging with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Emerging and Dow Jones.
Diversification Opportunities for Deutsche Emerging and Dow Jones
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between DEUTSCHE and Dow is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Emerging Markets and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Deutsche Emerging 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 Emerging Markets are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Deutsche Emerging i.e., Deutsche Emerging and Dow Jones go up and down completely randomly.
Pair Corralation between Deutsche Emerging and Dow Jones
Assuming the 90 days horizon Deutsche Emerging Markets is expected to under-perform the Dow Jones. But the mutual fund apears to be less risky and, when comparing its historical volatility, Deutsche Emerging Markets is 1.05 times less risky than Dow Jones. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Emerging Markets vs. Dow Jones Industrial
Performance |
| Timeline |
Deutsche Emerging and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Deutsche Emerging Markets
Pair trading matchups for Deutsche Emerging
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Deutsche Emerging and Dow Jones
The main advantage of trading using opposite Deutsche Emerging and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Emerging position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Deutsche Emerging vs. Deutsche Gnma Fund | Deutsche Emerging vs. Deutsche Short Term Municipal | Deutsche Emerging vs. Deutsche Short Term Municipal | Deutsche Emerging vs. Deutsche Science And |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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