Correlation Between Deutsche Multi and Sa Worldwide

Can any of the company-specific risk be diversified away by investing in both Deutsche Multi and Sa Worldwide 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 Multi and Sa Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deutsche Multi Asset Moderate and Sa Worldwide Moderate, you can compare the effects of market volatilities on Deutsche Multi and Sa Worldwide 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 Multi with a short position of Sa Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi and Sa Worldwide.

Diversification Opportunities for Deutsche Multi and Sa Worldwide

0.74

Correlation Coefficient

Deutsche Multi  Sa Worldwide

Poor diversification

The 3 months correlation between Deutsche and SAWMX is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Moderate and Sa Worldwide Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Worldwide Moderate and Deutsche Multi 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 Multi Asset Moderate are associated (or correlated) with Sa Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Worldwide Moderate has no effect on the direction of Deutsche Multi i.e., Deutsche Multi and Sa Worldwide go up and down completely randomly.

Pair Corralation between Deutsche Multi and Sa Worldwide

Assuming the 90 days horizon Deutsche Multi is expected to generate 1.03 times less return on investment than Sa Worldwide. In addition to that, Deutsche Multi is 1.11 times more volatile than Sa Worldwide Moderate. It trades about 0.09 of its total potential returns per unit of risk. Sa Worldwide Moderate is currently generating about 0.11 per unit of volatility. If you would invest  969.00  in Sa Worldwide Moderate on September 14, 2024 and sell it today you would earn a total of  273.00  from holding Sa Worldwide Moderate or generate 28.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Deutsche Multi Asset Moderate  vs.  Sa Worldwide Moderate

Deutsche Multi Asset

Risk-Adjusted Performance

3 of 100

Insignificant

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

Sa Worldwide Moderate

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Worldwide Moderate are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Sa Worldwide is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deutsche Multi and Sa Worldwide

The main advantage of trading using opposite Deutsche Multi and Sa Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Multi position performs unexpectedly, Sa Worldwide 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 Sa Worldwide will offset losses from the drop in Sa Worldwide's long position.

The idea behind Deutsche Multi Asset Moderate and Sa Worldwide Moderate 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.