Correlation Between Deutsche Multi and Deutsche Global

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

By analyzing existing cross correlation between Deutsche Multi Asset Global and Deutsche Global Real, you can compare the effects of market volatilities on Deutsche Multi and Deutsche Global 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 Deutsche Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi and Deutsche Global.

Diversification Opportunities for Deutsche Multi and Deutsche Global

-0.55

Correlation Coefficient

Deutsche Multi  Deutsche Global

Excellent diversification

The 3 months correlation between Deutsche and Deutsche is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Global and Deutsche Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Global Real 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 Global are associated (or correlated) with Deutsche Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Global Real has no effect on the direction of Deutsche Multi i.e., Deutsche Multi and Deutsche Global go up and down completely randomly.

Pair Corralation between Deutsche Multi and Deutsche Global

Assuming the 90 days horizon Deutsche Multi Asset Global is expected to generate 0.68 times more return on investment than Deutsche Global. However, Deutsche Multi Asset Global is 1.47 times less risky than Deutsche Global. It trades about 0.11 of its potential returns per unit of risk. Deutsche Global Real is currently generating about 0.04 per unit of risk. If you would invest  1,252  in Deutsche Multi Asset Global on September 20, 2024 and sell it today you would earn a total of  533.00  from holding Deutsche Multi Asset Global or generate 42.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Deutsche Multi Asset Global  vs.  Deutsche Global Real

Deutsche Multi Asset

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Multi Asset Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Deutsche Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Deutsche Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Deutsche Global 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 Deutsche Global

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

The idea behind Deutsche Multi Asset Global and Deutsche Global Real 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.