Correlation Between Blue Chip and Deutsche Gold

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

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

Diversification Opportunities for Blue Chip and Deutsche Gold

0.58

Correlation Coefficient

Blue Chip  Deutsche Gold

Very weak diversification

The 3 months correlation between Blue and Deutsche is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Blue Chip Growth 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 Blue Chip 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 Blue Chip Growth 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 Blue Chip i.e., Blue Chip and Deutsche Gold go up and down completely randomly.

Pair Corralation between Blue Chip and Deutsche Gold

Assuming the 90 days horizon Blue Chip Growth is expected to generate 0.49 times more return on investment than Deutsche Gold. However, Blue Chip Growth is 2.05 times less risky than Deutsche Gold. It trades about 0.25 of its potential returns per unit of risk. Deutsche Gold Precious is currently generating about 0.06 per unit of risk. If you would invest  1,701  in Blue Chip Growth on May 3, 2025 and sell it today you would earn a total of  256.00  from holding Blue Chip Growth or generate 15.05% return on investment over 90 days.

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

Blue Chip Growth  vs.  Deutsche Gold Precious

Blue Chip Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Chip Growth are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Blue Chip showed solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Gold Precious

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Gold Precious are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Deutsche Gold may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Blue Chip and Deutsche Gold

The main advantage of trading using opposite Blue Chip and Deutsche Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Chip 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 Blue Chip Growth 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.

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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 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.