Correlation Between Ab Impact and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Ep 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 Ab Impact and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Ep Emerging Markets, you can compare the effects of market volatilities on Ab Impact and Ep 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 Ab Impact with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Ep Emerging.
Diversification Opportunities for Ab Impact and Ep Emerging
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABIMX and EPASX is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Ab Impact i.e., Ab Impact and Ep Emerging go up and down completely randomly.
Pair Corralation between Ab Impact and Ep Emerging
Assuming the 90 days horizon Ab Impact is expected to generate 3.71 times less return on investment than Ep Emerging. But when comparing it to its historical volatility, Ab Impact Municipal is 2.04 times less risky than Ep Emerging. It trades about 0.11 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Ep Emerging Markets on November 28, 2024 and sell it today you would earn a total of 22.00 from holding Ep Emerging Markets or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Ep Emerging Markets
Performance |
| Timeline |
| Ab Impact Municipal |
| Ep Emerging Markets |
Ab Impact and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Ep Emerging
The main advantage of trading using opposite Ab Impact and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Ep 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Ab Impact vs. Small Pany Growth | Ab Impact vs. United Kingdom Small | Ab Impact vs. Champlain Small | Ab Impact vs. Nt International Small Mid |
| Ep Emerging vs. Rreef Property Trust | Ep Emerging vs. Vy Clarion Real | Ep Emerging vs. Redwood Real Estate | Ep Emerging vs. Cohen Steers Real |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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