Correlation Between Small Cap and Dws Emerging
Can any of the company-specific risk be diversified away by investing in both Small Cap and Dws Emerging 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 Small Cap and Dws Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Core and Dws Emerging Markets, you can compare the effects of market volatilities on Small Cap and Dws Emerging 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 Small Cap with a short position of Dws Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Dws Emerging.
Diversification Opportunities for Small Cap and Dws Emerging
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Small and Dws is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Core and Dws Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dws Emerging Markets and Small Cap 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 Small Cap Core are associated (or correlated) with Dws Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dws Emerging Markets has no effect on the direction of Small Cap i.e., Small Cap and Dws Emerging go up and down completely randomly.
Pair Corralation between Small Cap and Dws Emerging
Assuming the 90 days horizon Small Cap is expected to generate 7.03 times less return on investment than Dws Emerging. In addition to that, Small Cap is 1.13 times more volatile than Dws Emerging Markets. It trades about 0.02 of its total potential returns per unit of risk. Dws Emerging Markets is currently generating about 0.15 per unit of volatility. If you would invest 2,089 in Dws Emerging Markets on August 21, 2025 and sell it today you would earn a total of 212.00 from holding Dws Emerging Markets or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Core vs. Dws Emerging Markets
Performance |
| Timeline |
| Small Cap Core |
| Dws Emerging Markets |
Small Cap and Dws Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Dws Emerging
The main advantage of trading using opposite Small Cap and Dws Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Dws Emerging 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 Emerging will offset losses from the drop in Dws Emerging's long position.| Small Cap vs. Ab Global E | Small Cap vs. Ab Global E | Small Cap vs. Ab Global E | Small Cap vs. Ab All Market |
| Dws Emerging vs. Icon Financial Fund | Dws Emerging vs. Davis Financial Fund | Dws Emerging vs. Putnam Global Financials | Dws Emerging vs. Fidelity Advisor Financial |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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