Correlation Between Altus Power and Deutsche Real

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

By analyzing existing cross correlation between Altus Power and Deutsche Real Assets, you can compare the effects of market volatilities on Altus Power and Deutsche Real 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 Altus Power with a short position of Deutsche Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Power and Deutsche Real.

Diversification Opportunities for Altus Power and Deutsche Real

-0.45

Correlation Coefficient

Altus Power  Deutsche Real

Very good diversification

The 3 months correlation between Altus and Deutsche is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Altus Power and Deutsche Real Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Real Assets and Altus Power 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 Altus Power are associated (or correlated) with Deutsche Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Real Assets has no effect on the direction of Altus Power i.e., Altus Power and Deutsche Real go up and down completely randomly.

Pair Corralation between Altus Power and Deutsche Real

Given the investment horizon of 90 days Altus Power is expected to under-perform the Deutsche Real. In addition to that, Altus Power is 5.6 times more volatile than Deutsche Real Assets. It trades about -0.24 of its total potential returns per unit of risk. Deutsche Real Assets is currently generating about -0.21 per unit of volatility. If you would invest  1,139  in Deutsche Real Assets on January 20, 2024 and sell it today you would lose (33.00) from holding Deutsche Real Assets or give up 2.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Altus Power  vs.  Deutsche Real Assets

Altus Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altus Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Deutsche Real Assets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Real Assets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Deutsche Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Altus Power and Deutsche Real

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

The idea behind Altus Power and Deutsche Real Assets 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.