Correlation Between Cm Modity and Vaneck Emerging
Can any of the company-specific risk be diversified away by investing in both Cm Modity and Vaneck 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 Cm Modity and Vaneck Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cm Modity Index and Vaneck Emerging Markets, you can compare the effects of market volatilities on Cm Modity and Vaneck 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 Cm Modity with a short position of Vaneck Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cm Modity and Vaneck Emerging.
Diversification Opportunities for Cm Modity and Vaneck Emerging
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CMCAX and Vaneck is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cm Modity Index and Vaneck Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Emerging Markets and Cm Modity 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 Cm Modity Index are associated (or correlated) with Vaneck Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Emerging Markets has no effect on the direction of Cm Modity i.e., Cm Modity and Vaneck Emerging go up and down completely randomly.
Pair Corralation between Cm Modity and Vaneck Emerging
Assuming the 90 days horizon Cm Modity is expected to generate 7.21 times less return on investment than Vaneck Emerging. But when comparing it to its historical volatility, Cm Modity Index is 1.24 times less risky than Vaneck Emerging. It trades about 0.0 of its potential returns per unit of risk. Vaneck Emerging Markets is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,372 in Vaneck Emerging Markets on September 3, 2024 and sell it today you would earn a total of 115.00 from holding Vaneck Emerging Markets or generate 8.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cm Modity Index vs. Vaneck Emerging Markets
Performance |
| Timeline |
| Cm Modity Index |
| Vaneck Emerging Markets |
Cm Modity and Vaneck Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cm Modity and Vaneck Emerging
The main advantage of trading using opposite Cm Modity and Vaneck Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cm Modity position performs unexpectedly, Vaneck 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 Vaneck Emerging will offset losses from the drop in Vaneck Emerging's long position.| Cm Modity vs. Global Hard Assets | Cm Modity vs. Pimco Moditiesplus Strategy | Cm Modity vs. Aqr Risk Balanced Modities | Cm Modity vs. Parametric Modity Strategy |
| Vaneck Emerging vs. Ab Small Cap | Vaneck Emerging vs. Nasdaq 100 Fund Class | Vaneck Emerging vs. Growth Strategy Fund | Vaneck Emerging vs. Rbb Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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