Correlation Between Causeway International and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Causeway International 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 Causeway International and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Causeway International Opportunities and Ep Emerging Markets, you can compare the effects of market volatilities on Causeway International 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 Causeway International with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway International and Ep Emerging.
Diversification Opportunities for Causeway International and Ep Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Causeway and EPASX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Causeway International Opportu 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 Causeway International 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 Causeway International Opportunities 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 Causeway International i.e., Causeway International and Ep Emerging go up and down completely randomly.
Pair Corralation between Causeway International and Ep Emerging
Assuming the 90 days horizon Causeway International Opportunities is expected to generate 1.0 times more return on investment than Ep Emerging. However, Causeway International is 1.0 times more volatile than Ep Emerging Markets. It trades about 0.06 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about 0.01 per unit of risk. If you would invest 1,450 in Causeway International Opportunities on September 2, 2024 and sell it today you would earn a total of 275.00 from holding Causeway International Opportunities or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Causeway International Opportu vs. Ep Emerging Markets
Performance |
| Timeline |
| Causeway International |
| Ep Emerging Markets |
Causeway International and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Causeway International and Ep Emerging
The main advantage of trading using opposite Causeway International and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway International 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.| Causeway International vs. Touchstone Small Cap | Causeway International vs. Victory Rs Small | Causeway International vs. Kinetics Small Cap | Causeway International vs. Vanguard Growth And |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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