Correlation Between Emerald Insights and Jacob Micro
Can any of the company-specific risk be diversified away by investing in both Emerald Insights and Jacob Micro 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 Jacob Micro 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 Jacob Micro Cap, you can compare the effects of market volatilities on Emerald Insights and Jacob Micro 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 Jacob Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Insights and Jacob Micro.
Diversification Opportunities for Emerald Insights and Jacob Micro
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerald and Jacob is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Insights Fund and Jacob Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Micro Cap 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 Jacob Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Micro Cap has no effect on the direction of Emerald Insights i.e., Emerald Insights and Jacob Micro go up and down completely randomly.
Pair Corralation between Emerald Insights and Jacob Micro
Assuming the 90 days horizon Emerald Insights is expected to generate 20.14 times less return on investment than Jacob Micro. But when comparing it to its historical volatility, Emerald Insights Fund is 1.69 times less risky than Jacob Micro. It trades about 0.01 of its potential returns per unit of risk. Jacob Micro Cap is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,357 in Jacob Micro Cap on September 12, 2024 and sell it today you would earn a total of 120.00 from holding Jacob Micro Cap or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Emerald Insights Fund vs. Jacob Micro Cap
Performance |
| Timeline |
| Emerald Insights |
| Jacob Micro Cap |
Emerald Insights and Jacob Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Insights and Jacob Micro
The main advantage of trading using opposite Emerald Insights and Jacob Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Insights position performs unexpectedly, Jacob Micro 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 Jacob Micro will offset losses from the drop in Jacob Micro's long position.| Emerald Insights vs. Pace Municipal Fixed | Emerald Insights vs. T Rowe Price | Emerald Insights vs. Ishares Municipal Bond | Emerald Insights vs. Franklin High Yield |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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