Correlation Between International Stock and Acadian Emerging
Can any of the company-specific risk be diversified away by investing in both International Stock and Acadian 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 International Stock and Acadian Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Stock Fund and Acadian Emerging Markets, you can compare the effects of market volatilities on International Stock and Acadian 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 International Stock with a short position of Acadian Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Stock and Acadian Emerging.
Diversification Opportunities for International Stock and Acadian Emerging
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Acadian is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding International Stock Fund and Acadian Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Emerging Markets and International Stock 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 International Stock Fund are associated (or correlated) with Acadian Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Emerging Markets has no effect on the direction of International Stock i.e., International Stock and Acadian Emerging go up and down completely randomly.
Pair Corralation between International Stock and Acadian Emerging
Assuming the 90 days horizon International Stock Fund is expected to under-perform the Acadian Emerging. In addition to that, International Stock is 1.03 times more volatile than Acadian Emerging Markets. It trades about -0.04 of its total potential returns per unit of risk. Acadian Emerging Markets is currently generating about 0.03 per unit of volatility. If you would invest 2,289 in Acadian Emerging Markets on August 30, 2024 and sell it today you would earn a total of 59.00 from holding Acadian Emerging Markets or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Stock Fund vs. Acadian Emerging Markets
Performance |
| Timeline |
| International Stock |
| Acadian Emerging Markets |
International Stock and Acadian Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Stock and Acadian Emerging
The main advantage of trading using opposite International Stock and Acadian Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Stock position performs unexpectedly, Acadian 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 Acadian Emerging will offset losses from the drop in Acadian Emerging's long position.| International Stock vs. Dreyfus High Yield | International Stock vs. Dreyfusthe Boston Pany | International Stock vs. Dreyfus International Bond | International Stock vs. Dreyfus International Bond |
| Acadian Emerging vs. International Stock Fund | Acadian Emerging vs. Pear Tree Polaris | Acadian Emerging vs. Jpmorgan Value Advantage | Acadian Emerging vs. Bridge Builder Smallmid |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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