Correlation Between Adams Diversified and Emerging Europe
Can any of the company-specific risk be diversified away by investing in both Adams Diversified and Emerging Europe 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 Adams Diversified and Emerging Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Diversified Equity and Emerging Europe Fund, you can compare the effects of market volatilities on Adams Diversified and Emerging Europe 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 Adams Diversified with a short position of Emerging Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Diversified and Emerging Europe.
Diversification Opportunities for Adams Diversified and Emerging Europe
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Adams and Emerging is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Adams Diversified Equity and Emerging Europe Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Europe and Adams Diversified 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 Adams Diversified Equity are associated (or correlated) with Emerging Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Europe has no effect on the direction of Adams Diversified i.e., Adams Diversified and Emerging Europe go up and down completely randomly.
Pair Corralation between Adams Diversified and Emerging Europe
If you would invest 1,977 in Adams Diversified Equity on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Adams Diversified Equity or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Adams Diversified Equity vs. Emerging Europe Fund
Performance |
| Timeline |
| Adams Diversified Equity |
| Emerging Europe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Adams Diversified and Emerging Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Diversified and Emerging Europe
The main advantage of trading using opposite Adams Diversified and Emerging Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Diversified position performs unexpectedly, Emerging Europe 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 Emerging Europe will offset losses from the drop in Emerging Europe's long position.| Adams Diversified vs. Tri Continental Closed | Adams Diversified vs. SRH Total Return | Adams Diversified vs. Putnam Municipal Opportunities | Adams Diversified vs. Tortoise Energy Independence |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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