Correlation Between Ep Emerging and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Ep Emerging and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Emerging Markets.
Diversification Opportunities for Ep Emerging and Emerging Markets
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between EPASX and Emerging is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Ep Emerging i.e., Ep Emerging and Emerging Markets go up and down completely randomly.
Pair Corralation between Ep Emerging and Emerging Markets
Assuming the 90 days horizon Ep Emerging is expected to generate 1.97 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Ep Emerging Markets is 1.13 times less risky than Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,458 in Emerging Markets Fund on September 14, 2024 and sell it today you would earn a total of 214.00 from holding Emerging Markets Fund or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. Emerging Markets Fund
Performance |
| Timeline |
| Ep Emerging Markets |
| Emerging Markets |
Ep Emerging and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Emerging Markets
The main advantage of trading using opposite Ep Emerging and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Ep Emerging vs. Europac International Bond | Ep Emerging vs. Europac International Dividend | Ep Emerging vs. Ep Emerging Markets | Ep Emerging vs. Investment Managers Series |
| Emerging Markets vs. Ep Emerging Markets | Emerging Markets vs. Siit Emerging Markets | Emerging Markets vs. Ab All Market | Emerging Markets vs. Locorr Market Trend |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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