Correlation Between Ep Emerging and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and Commodities Strategy 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 Commodities Strategy 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 Commodities Strategy Fund, you can compare the effects of market volatilities on Ep Emerging and Commodities Strategy 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 Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Commodities Strategy.
Diversification Opportunities for Ep Emerging and Commodities Strategy
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EPEIX and Commodities is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy 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 Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Ep Emerging i.e., Ep Emerging and Commodities Strategy go up and down completely randomly.
Pair Corralation between Ep Emerging and Commodities Strategy
Assuming the 90 days horizon Ep Emerging Markets is expected to under-perform the Commodities Strategy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ep Emerging Markets is 1.2 times less risky than Commodities Strategy. The mutual fund trades about -0.26 of its potential returns per unit of risk. The Commodities Strategy Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,890 in Commodities Strategy Fund on August 29, 2024 and sell it today you would earn a total of 33.00 from holding Commodities Strategy Fund or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ep Emerging Markets vs. Commodities Strategy Fund
Performance |
| Timeline |
| Ep Emerging Markets |
| Commodities Strategy |
Ep Emerging and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ep Emerging and Commodities Strategy
The main advantage of trading using opposite Ep Emerging and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. Vanguard Emerging Markets | Ep Emerging vs. HUMANA INC | Ep Emerging vs. Aquagold International |
| Commodities Strategy vs. Pimco Moditiesplus Strategy | Commodities Strategy vs. HUMANA INC | Commodities Strategy vs. Aquagold International | Commodities Strategy vs. Barloworld Ltd ADR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |