Correlation Between Applied Finance and Origin Emerging
Can any of the company-specific risk be diversified away by investing in both Applied Finance and Origin 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 Applied Finance and Origin Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Origin Emerging Markets, you can compare the effects of market volatilities on Applied Finance and Origin 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 Applied Finance with a short position of Origin Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Origin Emerging.
Diversification Opportunities for Applied Finance and Origin Emerging
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Origin is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer and Origin Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Emerging Markets and Applied Finance 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 Applied Finance Explorer are associated (or correlated) with Origin Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Emerging Markets has no effect on the direction of Applied Finance i.e., Applied Finance and Origin Emerging go up and down completely randomly.
Pair Corralation between Applied Finance and Origin Emerging
If you would invest 2,178 in Applied Finance Explorer on November 7, 2024 and sell it today you would earn a total of 105.00 from holding Applied Finance Explorer or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.58% |
| Values | Daily Returns |
Applied Finance Explorer vs. Origin Emerging Markets
Performance |
| Timeline |
| Applied Finance Explorer |
| Origin Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Applied Finance and Origin Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Finance and Origin Emerging
The main advantage of trading using opposite Applied Finance and Origin Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance position performs unexpectedly, Origin 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 Origin Emerging will offset losses from the drop in Origin Emerging's long position.| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
| Origin Emerging vs. Hennessy Technology Fund | Origin Emerging vs. Fidelity Advisor Technology | Origin Emerging vs. Firsthand Technology Opportunities | Origin Emerging vs. Pgim Jennison Technology |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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