Correlation Between DGAZ and DWS
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
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 January 25, 2024 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 Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DGAZ vs. DWS
Performance |
| Timeline |
| DGAZ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| DWS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
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.| DGAZ vs. ProShares Ultra Bloomberg | DGAZ vs. Direxion Daily Semiconductor | DGAZ vs. MicroSectors Big Oil | DGAZ vs. Direxion Daily SP |
| DWS vs. ProShares Ultra Bloomberg | DWS vs. Direxion Daily Semiconductor | DWS vs. MicroSectors Big Oil | DWS vs. Direxion Daily SP |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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