Correlation Between EM and Big Time
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By analyzing existing cross correlation between EM and Big Time, you can compare the effects of market volatilities on EM and Big Time 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 EM with a short position of Big Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of EM and Big Time.
Diversification Opportunities for EM and Big Time
Pay attention - limited upside
The 3 months correlation between EM and Big is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EM and Big Time in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Time and EM 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 EM are associated (or correlated) with Big Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Time has no effect on the direction of EM i.e., EM and Big Time go up and down completely randomly.
Pair Corralation between EM and Big Time
If you would invest 15.00 in Big Time on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Big Time or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EM vs. Big Time
Performance |
| Timeline |
| EM |
| Big Time |
EM and Big Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EM and Big Time
The main advantage of trading using opposite EM and Big Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EM position performs unexpectedly, Big Time 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 Big Time will offset losses from the drop in Big Time's long position.The idea behind EM and Big Time pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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