Correlation Between Ab All and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ab All and Emerging Markets 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 All and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab All Market and Emerging Markets Fund, you can compare the effects of market volatilities on Ab All and Emerging Markets 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 All with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab All and Emerging Markets.
Diversification Opportunities for Ab All and Emerging Markets
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMTOX and Emerging is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ab All Market and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Ab All 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 All Market are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Ab All i.e., Ab All and Emerging Markets go up and down completely randomly.
Pair Corralation between Ab All and Emerging Markets
Assuming the 90 days horizon Ab All is expected to generate 1.47 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Ab All Market is 1.2 times less risky than Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,458 in Emerging Markets Fund on September 14, 2024 and sell it today you would earn a total of 214.00 from holding Emerging Markets Fund or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab All Market vs. Emerging Markets Fund
Performance |
| Timeline |
| Ab All Market |
| Emerging Markets |
Ab All and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab All and Emerging Markets
The main advantage of trading using opposite Ab All and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab All position performs unexpectedly, Emerging Markets 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 Markets will offset losses from the drop in Emerging Markets' long position.The idea behind Ab All Market and Emerging Markets Fund 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.| Emerging Markets vs. Ep Emerging Markets | Emerging Markets vs. Siit Emerging Markets | Emerging Markets vs. Ab All Market | Emerging Markets vs. Locorr Market Trend |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |