Correlation Between Cm Commodity and Unconstrained Emerging
Can any of the company-specific risk be diversified away by investing in both Cm Commodity and Unconstrained 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 Commodity and Unconstrained 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 Unconstrained Emerging Markets, you can compare the effects of market volatilities on Cm Commodity and Unconstrained 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 Commodity with a short position of Unconstrained Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cm Commodity and Unconstrained Emerging.
Diversification Opportunities for Cm Commodity and Unconstrained Emerging
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COMIX and Unconstrained is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cm Modity Index and Unconstrained Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unconstrained Emerging and Cm Commodity 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 Unconstrained Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unconstrained Emerging has no effect on the direction of Cm Commodity i.e., Cm Commodity and Unconstrained Emerging go up and down completely randomly.
Pair Corralation between Cm Commodity and Unconstrained Emerging
Assuming the 90 days horizon Cm Modity Index is expected to under-perform the Unconstrained Emerging. In addition to that, Cm Commodity is 2.16 times more volatile than Unconstrained Emerging Markets. It trades about -0.03 of its total potential returns per unit of risk. Unconstrained Emerging Markets is currently generating about 0.07 per unit of volatility. If you would invest 512.00 in Unconstrained Emerging Markets on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Unconstrained Emerging Markets or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cm Modity Index vs. Unconstrained Emerging Markets
Performance |
| Timeline |
| Cm Modity Index |
| Unconstrained Emerging |
Cm Commodity and Unconstrained Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cm Commodity and Unconstrained Emerging
The main advantage of trading using opposite Cm Commodity and Unconstrained Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cm Commodity position performs unexpectedly, Unconstrained 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 Unconstrained Emerging will offset losses from the drop in Unconstrained Emerging's long position.| Cm Commodity vs. John Hancock Money | Cm Commodity vs. Wells Fargo Funds | Cm Commodity vs. Franklin Government Money | Cm Commodity vs. Wt Mutual 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |