Correlation Between Emerald Insights and City National
Can any of the company-specific risk be diversified away by investing in both Emerald Insights and City National 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 Emerald Insights and City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Insights Fund and City National Rochdale, you can compare the effects of market volatilities on Emerald Insights and City National 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 Emerald Insights with a short position of City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Insights and City National.
Diversification Opportunities for Emerald Insights and City National
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Emerald and City is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Insights Fund and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale and Emerald Insights 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 Emerald Insights Fund are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Emerald Insights i.e., Emerald Insights and City National go up and down completely randomly.
Pair Corralation between Emerald Insights and City National
Assuming the 90 days horizon Emerald Insights Fund is expected to generate 11.28 times more return on investment than City National. However, Emerald Insights is 11.28 times more volatile than City National Rochdale. It trades about 0.07 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.18 per unit of risk. If you would invest 2,079 in Emerald Insights Fund on September 13, 2024 and sell it today you would earn a total of 223.00 from holding Emerald Insights Fund or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Emerald Insights Fund vs. City National Rochdale
Performance |
| Timeline |
| Emerald Insights |
| City National Rochdale |
Emerald Insights and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Insights and City National
The main advantage of trading using opposite Emerald Insights and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Insights position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Emerald Insights vs. Emerald Banking And | Emerald Insights vs. Emerald Growth Fund | Emerald Insights vs. Emerald Growth Fund | Emerald Insights vs. Emerald Insights Fund |
| City National vs. Deutsche Real Estate | City National vs. Short Real Estate | City National vs. Sa Real Estate | City National vs. Jhancock Real Estate |
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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