Correlation Between Astar and Ivy Emerging
Can any of the company-specific risk be diversified away by investing in both Astar and Ivy 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 Astar and Ivy Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Ivy Emerging Markets, you can compare the effects of market volatilities on Astar and Ivy 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 Astar with a short position of Ivy Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Ivy Emerging.
Diversification Opportunities for Astar and Ivy Emerging
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astar and Ivy is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Ivy Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Emerging Markets and Astar 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 Astar are associated (or correlated) with Ivy Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Emerging Markets has no effect on the direction of Astar i.e., Astar and Ivy Emerging go up and down completely randomly.
Pair Corralation between Astar and Ivy Emerging
Assuming the 90 days trading horizon Astar is expected to generate 7.47 times more return on investment than Ivy Emerging. However, Astar is 7.47 times more volatile than Ivy Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Ivy Emerging Markets is currently generating about -0.04 per unit of risk. If you would invest 6.20 in Astar on October 20, 2024 and sell it today you would earn a total of 0.16 from holding Astar or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Astar vs. Ivy Emerging Markets
Performance |
| Timeline |
| Astar |
| Ivy Emerging Markets |
Astar and Ivy Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Ivy Emerging
The main advantage of trading using opposite Astar and Ivy Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Ivy 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 Ivy Emerging will offset losses from the drop in Ivy Emerging's long position.The idea behind Astar and Ivy Emerging Markets 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.| Ivy Emerging vs. Ivy Large Cap | Ivy Emerging vs. Ivy Small Cap | Ivy Emerging vs. Ivy High Income | Ivy Emerging vs. Ivy Apollo Multi Asset |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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