Correlation Between Black Oak and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Black Oak 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 Black Oak and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Ep Emerging Markets, you can compare the effects of market volatilities on Black Oak 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 Black Oak with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Ep Emerging.
Diversification Opportunities for Black Oak and Ep Emerging
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Black and EPASX is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging 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 Black Oak 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 Black Oak Emerging 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 Black Oak i.e., Black Oak and Ep Emerging go up and down completely randomly.
Pair Corralation between Black Oak and Ep Emerging
Assuming the 90 days horizon Black Oak Emerging is expected to generate 1.25 times more return on investment than Ep Emerging. However, Black Oak is 1.25 times more volatile than Ep Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 791.00 in Black Oak Emerging on August 25, 2024 and sell it today you would earn a total of 31.00 from holding Black Oak Emerging or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Oak Emerging vs. Ep Emerging Markets
Performance |
| Timeline |
| Black Oak Emerging |
| Ep Emerging Markets |
Black Oak and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Ep Emerging
The main advantage of trading using opposite Black Oak and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak 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.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| Ep Emerging vs. Europac International Bond | Ep Emerging vs. Europac International Dividend | Ep Emerging vs. Ep Emerging Markets | Ep Emerging vs. Investment Managers Series |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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