Correlation Between Ep Emerging and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and Prudential 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 Ep Emerging and Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and Prudential Emerging Markets, you can compare the effects of market volatilities on Ep Emerging and Prudential 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 Ep Emerging with a short position of Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Prudential Emerging.
Diversification Opportunities for Ep Emerging and Prudential Emerging
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EPASX and Prudential is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging and Ep Emerging 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 Ep Emerging Markets are associated (or correlated) with Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Ep Emerging i.e., Ep Emerging and Prudential Emerging go up and down completely randomly.
Pair Corralation between Ep Emerging and Prudential Emerging
Assuming the 90 days horizon Ep Emerging Markets is expected to under-perform the Prudential Emerging. In addition to that, Ep Emerging is 1.67 times more volatile than Prudential Emerging Markets. It trades about -0.2 of its total potential returns per unit of risk. Prudential Emerging Markets is currently generating about -0.08 per unit of volatility. If you would invest 458.00 in Prudential Emerging Markets on August 31, 2024 and sell it today you would lose (4.00) from holding Prudential Emerging Markets or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. Prudential Emerging Markets
Performance |
| Timeline |
| Ep Emerging Markets |
| Prudential Emerging |
Ep Emerging and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Prudential Emerging
The main advantage of trading using opposite Ep Emerging and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Prudential 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Ep Emerging vs. Pace Municipal Fixed | Ep Emerging vs. Old Westbury Municipal | Ep Emerging vs. Blrc Sgy Mnp | Ep Emerging vs. Morningstar Municipal Bond |
| Prudential Emerging vs. Origin Emerging Markets | Prudential Emerging vs. Siit Emerging Markets | Prudential Emerging vs. Goldman Sachs Emerging | Prudential Emerging vs. Ep Emerging Markets |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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