Correlation Between Embark Commodity and Energy Fund
Can any of the company-specific risk be diversified away by investing in both Embark Commodity and Energy Fund 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 Energy Fund 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 Energy Fund Class, you can compare the effects of market volatilities on Embark Commodity and Energy Fund 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 Energy Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Commodity and Energy Fund.
Diversification Opportunities for Embark Commodity and Energy Fund
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Embark and Energy is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Embark Commodity Strategy and Energy Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fund Class 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 Energy Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fund Class has no effect on the direction of Embark Commodity i.e., Embark Commodity and Energy Fund go up and down completely randomly.
Pair Corralation between Embark Commodity and Energy Fund
Assuming the 90 days horizon Embark Commodity Strategy is expected to generate 0.88 times more return on investment than Energy Fund. However, Embark Commodity Strategy is 1.14 times less risky than Energy Fund. It trades about 0.16 of its potential returns per unit of risk. Energy Fund Class is currently generating about -0.03 per unit of risk. If you would invest 1,003 in Embark Commodity Strategy on October 26, 2024 and sell it today you would earn a total of 59.00 from holding Embark Commodity Strategy or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embark Commodity Strategy vs. Energy Fund Class
Performance |
| Timeline |
| Embark Commodity Strategy |
| Energy Fund Class |
Embark Commodity and Energy Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embark Commodity and Energy Fund
The main advantage of trading using opposite Embark Commodity and Energy Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Commodity position performs unexpectedly, Energy Fund 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 Energy Fund will offset losses from the drop in Energy Fund's long position.| Embark Commodity vs. John Hancock Money | Embark Commodity vs. Prudential Government Money | Embark Commodity vs. Dws Government Money | Embark Commodity vs. Elfun Government Money |
| Energy Fund vs. Jpmorgan Emerging Markets | Energy Fund vs. Embark Commodity Strategy | Energy Fund vs. Wasatch Frontier Emerging | Energy Fund vs. Balanced Strategy 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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