Correlation Between Deutsche Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Deutsche Global and Western Asset 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 Global and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Global Inflation and Western Asset Inflation, you can compare the effects of market volatilities on Deutsche Global and Western Asset 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 Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Global and Western Asset.
Diversification Opportunities for Deutsche Global and Western Asset
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Deutsche and WESTERN is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Global Inflation and Western Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Inflation and Deutsche Global 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 Global Inflation are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Inflation has no effect on the direction of Deutsche Global i.e., Deutsche Global and Western Asset go up and down completely randomly.
Pair Corralation between Deutsche Global and Western Asset
Assuming the 90 days horizon Deutsche Global Inflation is expected to under-perform the Western Asset. But the mutual fund apears to be less risky and, when comparing its historical volatility, Deutsche Global Inflation is 1.18 times less risky than Western Asset. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Western Asset Inflation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 935.00 in Western Asset Inflation on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Western Asset Inflation or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Global Inflation vs. Western Asset Inflation
Performance |
| Timeline |
| Deutsche Global Inflation |
| Western Asset Inflation |
Deutsche Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Global and Western Asset
The main advantage of trading using opposite Deutsche Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Global position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Deutsche Global vs. Artisan Emerging Markets | Deutsche Global vs. Limited Term Tax | Deutsche Global vs. Rationalpier 88 Convertible | Deutsche Global vs. Oklahoma College Savings |
| Western Asset vs. Rational Special Situations | Western Asset vs. Balanced Fund Investor | Western Asset vs. Ab Global Risk | Western Asset vs. Ab Value Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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