Correlation Between Dws Emerging and Balanced Strategy

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Can any of the company-specific risk be diversified away by investing in both Dws Emerging and Balanced Strategy 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 Dws Emerging and Balanced Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dws Emerging Markets and Balanced Strategy Fund, you can compare the effects of market volatilities on Dws Emerging and Balanced Strategy 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 Dws Emerging with a short position of Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dws Emerging and Balanced Strategy.

Diversification Opportunities for Dws Emerging and Balanced Strategy

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Dws and Balanced is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dws Emerging Markets and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy and Dws 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 Dws Emerging Markets are associated (or correlated) with Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of Dws Emerging i.e., Dws Emerging and Balanced Strategy go up and down completely randomly.

Pair Corralation between Dws Emerging and Balanced Strategy

Assuming the 90 days horizon Dws Emerging is expected to generate 1.26 times less return on investment than Balanced Strategy. In addition to that, Dws Emerging is 1.85 times more volatile than Balanced Strategy Fund. It trades about 0.03 of its total potential returns per unit of risk. Balanced Strategy Fund is currently generating about 0.07 per unit of volatility. If you would invest  998.00  in Balanced Strategy Fund on October 26, 2024 and sell it today you would earn a total of  46.00  from holding Balanced Strategy Fund or generate 4.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Dws Emerging Markets  vs.  Balanced Strategy Fund

 Performance 
       Timeline  
Dws Emerging Markets 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Dws Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dws Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Balanced Strategy 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Balanced Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dws Emerging and Balanced Strategy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dws Emerging and Balanced Strategy

The main advantage of trading using opposite Dws Emerging and Balanced Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Emerging position performs unexpectedly, Balanced Strategy 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 Balanced Strategy will offset losses from the drop in Balanced Strategy's long position.
The idea behind Dws Emerging Markets and Balanced Strategy Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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