Correlation Between Emerging Markets and Intal High
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Intal High 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 Emerging Markets and Intal High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets E and Intal High Relative, you can compare the effects of market volatilities on Emerging Markets and Intal High 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 Emerging Markets with a short position of Intal High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Intal High.
Diversification Opportunities for Emerging Markets and Intal High
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and Intal is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets E and Intal High Relative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intal High Relative and Emerging Markets 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 Emerging Markets E are associated (or correlated) with Intal High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intal High Relative has no effect on the direction of Emerging Markets i.e., Emerging Markets and Intal High go up and down completely randomly.
Pair Corralation between Emerging Markets and Intal High
Assuming the 90 days horizon Emerging Markets E is expected to under-perform the Intal High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Emerging Markets E is 1.03 times less risky than Intal High. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Intal High Relative is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 1,305 in Intal High Relative on August 31, 2024 and sell it today you would lose (27.00) from holding Intal High Relative or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets E vs. Intal High Relative
Performance |
| Timeline |
| Emerging Markets E |
| Intal High Relative |
Emerging Markets and Intal High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Intal High
The main advantage of trading using opposite Emerging Markets and Intal High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Intal High 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 Intal High will offset losses from the drop in Intal High's long position.| Emerging Markets vs. International E Equity | Emerging Markets vs. Dfa International Small | Emerging Markets vs. Us E Equity | Emerging Markets vs. Us Large Cap |
| Intal High vs. Vanguard Total International | Intal High vs. Vanguard Developed Markets | Intal High vs. Vanguard Developed Markets | Intal High vs. HUMANA INC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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