Correlation Between Gateway Equity and Deutsche Gold

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

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

Diversification Opportunities for Gateway Equity and Deutsche Gold

0.63

Correlation Coefficient

Gateway Equity  Deutsche Gold

Poor diversification

The 3 months correlation between Gateway and Deutsche is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Equity Call and Deutsche Gold Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Gold Precious and Gateway 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 Gateway Equity Call are associated (or correlated) with Deutsche Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Gold Precious has no effect on the direction of Gateway Equity i.e., Gateway Equity and Deutsche Gold go up and down completely randomly.

Pair Corralation between Gateway Equity and Deutsche Gold

Assuming the 90 days horizon Gateway Equity is expected to generate 1.48 times less return on investment than Deutsche Gold. But when comparing it to its historical volatility, Gateway Equity Call is 4.97 times less risky than Deutsche Gold. It trades about 0.35 of its potential returns per unit of risk. Deutsche Gold Precious is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  6,873  in Deutsche Gold Precious on May 1, 2025 and sell it today you would earn a total of  824.00  from holding Deutsche Gold Precious or generate 11.99% return on investment over 90 days.

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

Gateway Equity Call  vs.  Deutsche Gold Precious

Gateway Equity Call

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Equity Call are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gateway Equity may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Deutsche Gold Precious

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Gold Precious are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Deutsche Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gateway Equity and Deutsche Gold

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

The idea behind Gateway Equity Call and Deutsche Gold Precious 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.