Correlation Between Vanguard Total and Deutsche Multi-asset
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Deutsche Multi-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 Vanguard Total and Deutsche Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total Stock and Deutsche Multi Asset Global, you can compare the effects of market volatilities on Vanguard Total and Deutsche Multi-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 Vanguard Total with a short position of Deutsche Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Deutsche Multi-asset.
Diversification Opportunities for Vanguard Total and Deutsche Multi-asset
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Deutsche is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Deutsche Multi Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Multi Asset and Vanguard Total 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 Vanguard Total Stock are associated (or correlated) with Deutsche Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Multi Asset has no effect on the direction of Vanguard Total i.e., Vanguard Total and Deutsche Multi-asset go up and down completely randomly.
Pair Corralation between Vanguard Total and Deutsche Multi-asset
Assuming the 90 days horizon Vanguard Total Stock is expected to under-perform the Deutsche Multi-asset. In addition to that, Vanguard Total is 1.3 times more volatile than Deutsche Multi Asset Global. It trades about -0.06 of its total potential returns per unit of risk. Deutsche Multi Asset Global is currently generating about -0.02 per unit of volatility. If you would invest 1,873 in Deutsche Multi Asset Global on November 27, 2024 and sell it today you would lose (4.00) from holding Deutsche Multi Asset Global or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total Stock vs. Deutsche Multi Asset Global
Performance |
| Timeline |
| Vanguard Total Stock |
| Deutsche Multi Asset |
Vanguard Total and Deutsche Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Deutsche Multi-asset
The main advantage of trading using opposite Vanguard Total and Deutsche Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Deutsche Multi-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 Deutsche Multi-asset will offset losses from the drop in Deutsche Multi-asset's long position.| Vanguard Total vs. Vanguard Total International | Vanguard Total vs. Vanguard Total Bond | Vanguard Total vs. Vanguard Small Cap Index | Vanguard Total vs. Vanguard Reit Index |
| Deutsche Multi-asset vs. Barings High Yield | Deutsche Multi-asset vs. Ab High Income | Deutsche Multi-asset vs. Siit High Yield | Deutsche Multi-asset vs. Mesirow Financial High |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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