Correlation Between Deutsche Multi-asset and Alliancebernstein

Can any of the company-specific risk be diversified away by investing in both Deutsche Multi-asset and Alliancebernstein 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-asset and Alliancebernstein 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 Alliancebernstein Global High, you can compare the effects of market volatilities on Deutsche Multi-asset and Alliancebernstein 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-asset with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Multi-asset and Alliancebernstein.

Diversification Opportunities for Deutsche Multi-asset and Alliancebernstein

0.48

Correlation Coefficient

Deutsche Multi-asset  Alliancebernstein

Very weak diversification

The 3 months correlation between Deutsche and Alliancebernstein is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Multi Asset Global and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Deutsche Multi-asset 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Deutsche Multi-asset i.e., Deutsche Multi-asset and Alliancebernstein go up and down completely randomly.

Pair Corralation between Deutsche Multi-asset and Alliancebernstein

Assuming the 90 days horizon Deutsche Multi Asset Global is expected to generate 1.05 times more return on investment than Alliancebernstein. However, Deutsche Multi-asset is 1.05 times more volatile than Alliancebernstein Global High. It trades about 0.11 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.11 per unit of risk. If you would invest  1,153  in Deutsche Multi Asset Global on June 21, 2024 and sell it today you would earn a total of  651.00  from holding Deutsche Multi Asset Global or generate 56.46% return on investment over 90 days.

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

Deutsche Multi Asset Global  vs.  Alliancebernstein Global High

Deutsche Multi Asset

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Multi Asset Global are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Deutsche Multi-asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alliancebernstein

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alliancebernstein Global High are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly weak basic indicators, Alliancebernstein may actually be approaching a critical reversion point that can send shares even higher in October 2024.

Pair Trading with Deutsche Multi-asset and Alliancebernstein

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

The idea behind Deutsche Multi Asset Global and Alliancebernstein Global High 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.