Correlation Between Deutsche Short and Deutsche Gnma
Can any of the company-specific risk be diversified away by investing in both Deutsche Short and Deutsche Gnma 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 Short and Deutsche Gnma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Short Term Municipal and Deutsche Gnma Fund, you can compare the effects of market volatilities on Deutsche Short and Deutsche Gnma 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 Short with a short position of Deutsche Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Short and Deutsche Gnma.
Diversification Opportunities for Deutsche Short and Deutsche Gnma
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Deutsche is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Short Term Municipal and Deutsche Gnma Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Gnma and Deutsche Short 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 Short Term Municipal are associated (or correlated) with Deutsche Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Gnma has no effect on the direction of Deutsche Short i.e., Deutsche Short and Deutsche Gnma go up and down completely randomly.
Pair Corralation between Deutsche Short and Deutsche Gnma
Assuming the 90 days horizon Deutsche Short Term Municipal is expected to generate 0.26 times more return on investment than Deutsche Gnma. However, Deutsche Short Term Municipal is 3.91 times less risky than Deutsche Gnma. It trades about -0.08 of its potential returns per unit of risk. Deutsche Gnma Fund is currently generating about -0.24 per unit of risk. If you would invest 988.00 in Deutsche Short Term Municipal on August 25, 2024 and sell it today you would lose (3.00) from holding Deutsche Short Term Municipal or give up 0.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Short Term Municipal vs. Deutsche Gnma Fund
Performance |
| Timeline |
| Deutsche Short Term |
| Deutsche Gnma |
Deutsche Short and Deutsche Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Short and Deutsche Gnma
The main advantage of trading using opposite Deutsche Short and Deutsche Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Short position performs unexpectedly, Deutsche Gnma 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 Deutsche Gnma will offset losses from the drop in Deutsche Gnma's long position.| Deutsche Short vs. Deutsche Gnma Fund | Deutsche Short vs. Deutsche Short Term Municipal | Deutsche Short vs. Deutsche Science And | Deutsche Short vs. Deutsche Science And |
| Deutsche Gnma vs. Jpmorgan High Yield | Deutsche Gnma vs. Guggenheim High Yield | Deutsche Gnma vs. American Century High | Deutsche Gnma vs. Pia High Yield |
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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