Correlation Between Deutsche Equity and Deutsche Multi

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

By analyzing existing cross correlation between Deutsche Equity 500 and Deutsche Multi Asset Moderate, you can compare the effects of market volatilities on Deutsche Equity and Deutsche Multi 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 Equity with a short position of Deutsche Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Equity and Deutsche Multi.

Diversification Opportunities for Deutsche Equity and Deutsche Multi

0.99

Correlation Coefficient

Deutsche Equity  Deutsche Multi

No risk reduction

The 3 months correlation between Deutsche and Deutsche is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Equity 500 and Deutsche Multi Asset Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Multi Asset and Deutsche Equity 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 Equity 500 are associated (or correlated) with Deutsche Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Multi Asset has no effect on the direction of Deutsche Equity i.e., Deutsche Equity and Deutsche Multi go up and down completely randomly.

Pair Corralation between Deutsche Equity and Deutsche Multi

Assuming the 90 days horizon Deutsche Equity 500 is expected to generate 1.69 times more return on investment than Deutsche Multi. However, Deutsche Equity is 1.69 times more volatile than Deutsche Multi Asset Moderate. It trades about 0.24 of its potential returns per unit of risk. Deutsche Multi Asset Moderate is currently generating about 0.19 per unit of risk. If you would invest  14,425  in Deutsche Equity 500 on May 6, 2025 and sell it today you would earn a total of  1,664  from holding Deutsche Equity 500 or generate 11.54% return on investment over 90 days.

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

Deutsche Equity 500  vs.  Deutsche Multi Asset Moderate

Deutsche Equity 500

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Equity 500 are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Deutsche Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Deutsche Multi Asset

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Multi Asset Moderate are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Deutsche Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deutsche Equity and Deutsche Multi

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

The idea behind Deutsche Equity 500 and Deutsche Multi Asset Moderate 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.