Correlation Between Deutsche Small and Dws Emerging
Can any of the company-specific risk be diversified away by investing in both Deutsche Small 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 Deutsche Small and Dws Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Small Cap and Dws Emerging Markets, you can compare the effects of market volatilities on Deutsche Small 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 Deutsche Small with a short position of Dws Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Small and Dws Emerging.
Diversification Opportunities for Deutsche Small and Dws Emerging
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Dws is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Small Cap 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 Deutsche Small 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 Small Cap 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 Deutsche Small i.e., Deutsche Small and Dws Emerging go up and down completely randomly.
Pair Corralation between Deutsche Small and Dws Emerging
Assuming the 90 days horizon Deutsche Small is expected to generate 1.2 times less return on investment than Dws Emerging. In addition to that, Deutsche Small is 1.13 times more volatile than Dws Emerging Markets. It trades about 0.18 of its total potential returns per unit of risk. Dws Emerging Markets is currently generating about 0.24 per unit of volatility. If you would invest 1,612 in Dws Emerging Markets on July 7, 2025 and sell it today you would earn a total of 667.00 from holding Dws Emerging Markets or generate 41.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Small Cap vs. Dws Emerging Markets
Performance |
| Timeline |
| Deutsche Small Cap |
| Dws Emerging Markets |
Deutsche Small and Dws Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Small and Dws Emerging
The main advantage of trading using opposite Deutsche Small and Dws Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Small 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.| Deutsche Small vs. Morningstar Aggressive Growth | Deutsche Small vs. Msift High Yield | Deutsche Small vs. Franklin California High | Deutsche Small vs. Fidelity American High |
| Dws Emerging vs. Deutsche Gnma Fund | Dws Emerging vs. Deutsche Short Term Municipal | Dws Emerging vs. Deutsche Short Term Municipal | Dws Emerging vs. Deutsche Science And |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |