Correlation Between Embark Commodity and Specialized Technology
Can any of the company-specific risk be diversified away by investing in both Embark Commodity and Specialized Technology 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 Specialized Technology 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 Specialized Technology Fund, you can compare the effects of market volatilities on Embark Commodity and Specialized Technology 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 Specialized Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embark Commodity and Specialized Technology.
Diversification Opportunities for Embark Commodity and Specialized Technology
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Embark and Specialized is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Embark Commodity Strategy and Specialized Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Specialized Technology 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 Specialized Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Specialized Technology has no effect on the direction of Embark Commodity i.e., Embark Commodity and Specialized Technology go up and down completely randomly.
Pair Corralation between Embark Commodity and Specialized Technology
Assuming the 90 days horizon Embark Commodity Strategy is expected to generate 0.94 times more return on investment than Specialized Technology. However, Embark Commodity Strategy is 1.06 times less risky than Specialized Technology. It trades about 0.27 of its potential returns per unit of risk. Specialized Technology Fund is currently generating about 0.19 per unit of risk. If you would invest 1,014 in Embark Commodity Strategy on November 4, 2024 and sell it today you would earn a total of 44.00 from holding Embark Commodity Strategy or generate 4.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embark Commodity Strategy vs. Specialized Technology Fund
Performance |
| Timeline |
| Embark Commodity Strategy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Specialized Technology |
Embark Commodity and Specialized Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embark Commodity and Specialized Technology
The main advantage of trading using opposite Embark Commodity and Specialized Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embark Commodity position performs unexpectedly, Specialized Technology 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 Specialized Technology will offset losses from the drop in Specialized Technology's long position.| Embark Commodity vs. Aqr Diversified Arbitrage | Embark Commodity vs. Wilmington Diversified Income | Embark Commodity vs. Davenport Small Cap | Embark Commodity vs. Wells Fargo Diversified |
| Specialized Technology vs. Oil Gas Ultrasector | Specialized Technology vs. Vanguard Energy Index | Specialized Technology vs. Fidelity Advisor Energy | Specialized Technology vs. Thrivent Natural Resources |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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