Correlation Between Emerging Markets and Vaneck Emerging
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Vaneck Emerging 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 Emerging Markets and Vaneck Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Fund and Vaneck Emerging Markets, you can compare the effects of market volatilities on Emerging Markets and Vaneck Emerging 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 Emerging Markets with a short position of Vaneck Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Vaneck Emerging.
Diversification Opportunities for Emerging Markets and Vaneck Emerging
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Emerging and Vaneck is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Fund and Vaneck Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Emerging Markets and Emerging Markets 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 Emerging Markets Fund are associated (or correlated) with Vaneck Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Emerging Markets has no effect on the direction of Emerging Markets i.e., Emerging Markets and Vaneck Emerging go up and down completely randomly.
Pair Corralation between Emerging Markets and Vaneck Emerging
Assuming the 90 days horizon Emerging Markets Fund is expected to generate 0.99 times more return on investment than Vaneck Emerging. However, Emerging Markets Fund is 1.01 times less risky than Vaneck Emerging. It trades about -0.2 of its potential returns per unit of risk. Vaneck Emerging Markets is currently generating about -0.21 per unit of risk. If you would invest 1,559 in Emerging Markets Fund on August 29, 2024 and sell it today you would lose (54.00) from holding Emerging Markets Fund or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Fund vs. Vaneck Emerging Markets
Performance |
| Timeline |
| Emerging Markets |
| Vaneck Emerging Markets |
Emerging Markets and Vaneck Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Vaneck Emerging
The main advantage of trading using opposite Emerging Markets and Vaneck Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Vaneck Emerging 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 Vaneck Emerging will offset losses from the drop in Vaneck Emerging's long position.| Emerging Markets vs. Precious Metals And | Emerging Markets vs. Great West Goldman Sachs | Emerging Markets vs. Global Gold Fund | Emerging Markets vs. Goldman Sachs Centrated |
| Vaneck Emerging vs. Nova Fund Class | Vaneck Emerging vs. Nasdaq 100 Index Fund | Vaneck Emerging vs. Jp Morgan Smartretirement | Vaneck Emerging vs. Barings Active Short |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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