Correlation Between Embark Commodity and Embark Small
Can any of the company-specific risk be diversified away by investing in both Embark Commodity and Embark Small 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 Embark Commodity and Embark Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embark Commodity Strategy and Embark Small Cap, you can compare the effects of market volatilities on Embark Commodity and Embark Small 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 Embark Commodity with a short position of Embark Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Commodity and Embark Small.
Diversification Opportunities for Embark Commodity and Embark Small
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Embark and Embark is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Embark Commodity Strategy and Embark Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Small Cap and Embark 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 Embark Commodity Strategy are associated (or correlated) with Embark Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Small Cap has no effect on the direction of Embark Commodity i.e., Embark Commodity and Embark Small go up and down completely randomly.
Pair Corralation between Embark Commodity and Embark Small
Assuming the 90 days horizon Embark Commodity Strategy is expected to generate 0.96 times more return on investment than Embark Small. However, Embark Commodity Strategy is 1.04 times less risky than Embark Small. It trades about 0.28 of its potential returns per unit of risk. Embark Small Cap is currently generating about 0.05 per unit of risk. If you would invest 1,017 in Embark Commodity Strategy on November 7, 2024 and sell it today you would earn a total of 44.00 from holding Embark Commodity Strategy or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Embark Commodity Strategy vs. Embark Small Cap
Performance |
| Timeline |
| Embark Commodity Strategy |
| Embark Small Cap |
Embark Commodity and Embark Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embark Commodity and Embark Small
The main advantage of trading using opposite Embark Commodity and Embark Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Commodity position performs unexpectedly, Embark Small 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 Embark Small will offset losses from the drop in Embark Small's long position.| Embark Commodity vs. Harbor Vertible Securities | Embark Commodity vs. Harbor Diversified International | Embark Commodity vs. Harbor International Fund | Embark Commodity vs. Harbor International Small |
| Embark Small vs. Diamond Hill Large | Embark Small vs. Small Pany Fund | Embark Small vs. Clearbridge Small Cap | Embark Small vs. Amg Gwk 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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