Correlation Between Financial Industries and Emerald Banking
Can any of the company-specific risk be diversified away by investing in both Financial Industries and Emerald Banking 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 Financial Industries and Emerald Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Emerald Banking And, you can compare the effects of market volatilities on Financial Industries and Emerald Banking 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 Financial Industries with a short position of Emerald Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Emerald Banking.
Diversification Opportunities for Financial Industries and Emerald Banking
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Financial and Emerald is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund and Emerald Banking And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Banking And and Financial Industries 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 Financial Industries Fund are associated (or correlated) with Emerald Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Banking And has no effect on the direction of Financial Industries i.e., Financial Industries and Emerald Banking go up and down completely randomly.
Pair Corralation between Financial Industries and Emerald Banking
Assuming the 90 days horizon Financial Industries Fund is expected to generate 0.64 times more return on investment than Emerald Banking. However, Financial Industries Fund is 1.57 times less risky than Emerald Banking. It trades about 0.15 of its potential returns per unit of risk. Emerald Banking And is currently generating about 0.1 per unit of risk. If you would invest 1,305 in Financial Industries Fund on August 29, 2024 and sell it today you would earn a total of 493.00 from holding Financial Industries Fund or generate 37.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Industries Fund vs. Emerald Banking And
Performance |
| Timeline |
| Financial Industries |
| Emerald Banking And |
Financial Industries and Emerald Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Emerald Banking
The main advantage of trading using opposite Financial Industries and Emerald Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries position performs unexpectedly, Emerald Banking 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 Emerald Banking will offset losses from the drop in Emerald Banking's long position.| Financial Industries vs. Artisan Global Unconstrained | Financial Industries vs. Dreyfusstandish Global Fixed | Financial Industries vs. Ab Global Risk | Financial Industries vs. Blue Current Global |
| Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Emerald Banking And | Emerald Banking vs. Hennessy Small Cap |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |