Correlation Between DGAZ and DWS

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Can any of the company-specific risk be diversified away by investing in both DGAZ and DWS 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 DGAZ and DWS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DGAZ and DWS, you can compare the effects of market volatilities on DGAZ and DWS 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 DGAZ with a short position of DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DGAZ and DWS.

Diversification Opportunities for DGAZ and DWS

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between DGAZ and DWS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding DGAZ and DWS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS and DGAZ 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 DGAZ are associated (or correlated) with DWS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS has no effect on the direction of DGAZ i.e., DGAZ and DWS go up and down completely randomly.

Pair Corralation between DGAZ and DWS

If you would invest (100.00) in DWS on December 29, 2023 and sell it today you would earn a total of  100.00  from holding DWS or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DGAZ  vs.  DWS

 Performance 
       Timeline  
DGAZ 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days DGAZ has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, DGAZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
DWS 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days DWS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, DWS is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

DGAZ and DWS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DGAZ and DWS

The main advantage of trading using opposite DGAZ and DWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DGAZ position performs unexpectedly, DWS 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 DWS will offset losses from the drop in DWS's long position.
The idea behind DGAZ and DWS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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