Correlation Between Eic Value and Global Opportunity
Can any of the company-specific risk be diversified away by investing in both Eic Value and Global Opportunity 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 Eic Value and Global Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Global Opportunity Portfolio, you can compare the effects of market volatilities on Eic Value and Global Opportunity 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 Eic Value with a short position of Global Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Global Opportunity.
Diversification Opportunities for Eic Value and Global Opportunity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eic and Global is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Global Opportunity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunity and Eic Value 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 Eic Value Fund are associated (or correlated) with Global Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunity has no effect on the direction of Eic Value i.e., Eic Value and Global Opportunity go up and down completely randomly.
Pair Corralation between Eic Value and Global Opportunity
Assuming the 90 days horizon Eic Value is expected to generate 2.14 times less return on investment than Global Opportunity. But when comparing it to its historical volatility, Eic Value Fund is 1.59 times less risky than Global Opportunity. It trades about 0.22 of its potential returns per unit of risk. Global Opportunity Portfolio is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,851 in Global Opportunity Portfolio on September 4, 2024 and sell it today you would earn a total of 764.00 from holding Global Opportunity Portfolio or generate 26.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Global Opportunity Portfolio
Performance |
| Timeline |
| Eic Value Fund |
| Global Opportunity |
Eic Value and Global Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Global Opportunity
The main advantage of trading using opposite Eic Value and Global Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Global Opportunity 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 Global Opportunity will offset losses from the drop in Global Opportunity's long position.| Eic Value vs. Qs Large Cap | Eic Value vs. Balanced Fund Investor | Eic Value vs. Abr 7525 Volatility | Eic Value vs. Bbh Intermediate Municipal |
| Global Opportunity vs. Emerging Markets Equity | Global Opportunity vs. Global Fixed Income | Global Opportunity vs. Global Fixed Income | Global Opportunity vs. Global Fixed Income |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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