Correlation Between Emerging Markets and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Emerging Markets 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 Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Value and Emerging Markets Small, you can compare the effects of market volatilities on Emerging Markets and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Emerging Markets.
Diversification Opportunities for Emerging Markets and Emerging Markets
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerging and Emerging is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Value and Emerging Markets Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Small 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 Value are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Small has no effect on the direction of Emerging Markets i.e., Emerging Markets and Emerging Markets go up and down completely randomly.
Pair Corralation between Emerging Markets and Emerging Markets
Assuming the 90 days horizon Emerging Markets Value is expected to under-perform the Emerging Markets. In addition to that, Emerging Markets is 1.05 times more volatile than Emerging Markets Small. It trades about -0.13 of its total potential returns per unit of risk. Emerging Markets Small is currently generating about 0.09 per unit of volatility. If you would invest 2,333 in Emerging Markets Small on September 19, 2024 and sell it today you would earn a total of 27.00 from holding Emerging Markets Small or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Value vs. Emerging Markets Small
Performance |
| Timeline |
| Emerging Markets Value |
| Emerging Markets Small |
Emerging Markets and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Emerging Markets
The main advantage of trading using opposite Emerging Markets and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Emerging Markets vs. Dfa International Small | Emerging Markets vs. International Small Pany | Emerging Markets vs. Emerging Markets Small | Emerging Markets vs. Dfa International Value |
| Emerging Markets vs. Intal High Relative | Emerging Markets vs. Dfa International | Emerging Markets vs. Dfa Inflation Protected | Emerging Markets vs. Dfa International Small |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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