Correlation Between Ep Emerging and American Century
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and American Century 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 American Century 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 American Century High, you can compare the effects of market volatilities on Ep Emerging and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and American Century.
Diversification Opportunities for Ep Emerging and American Century
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EPEIX and American is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and American Century High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century High 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century High has no effect on the direction of Ep Emerging i.e., Ep Emerging and American Century go up and down completely randomly.
Pair Corralation between Ep Emerging and American Century
Assuming the 90 days horizon Ep Emerging is expected to generate 1.23 times less return on investment than American Century. In addition to that, Ep Emerging is 6.51 times more volatile than American Century High. It trades about 0.02 of its total potential returns per unit of risk. American Century High is currently generating about 0.19 per unit of volatility. If you would invest 858.00 in American Century High on September 3, 2024 and sell it today you would earn a total of 16.00 from holding American Century High or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. American Century High
Performance |
| Timeline |
| Ep Emerging Markets |
| American Century High |
Ep Emerging and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and American Century
The main advantage of trading using opposite Ep Emerging and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Ep Emerging vs. Franklin Mutual Global | Ep Emerging vs. Templeton Growth Fund | Ep Emerging vs. Franklin Real Estate | Ep Emerging vs. HUMANA INC |
| American Century vs. Transamerica Emerging Markets | American Century vs. T Rowe Price | American Century vs. Growth Strategy Fund | American Century 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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