Correlation Between American Funds and Vaneck Emerging
Can any of the company-specific risk be diversified away by investing in both American Funds and Vaneck 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 American Funds and Vaneck Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds New and Vaneck Emerging Markets, you can compare the effects of market volatilities on American Funds and Vaneck 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 American Funds with a short position of Vaneck Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Vaneck Emerging.
Diversification Opportunities for American Funds and Vaneck Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Vaneck is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Funds New and Vaneck Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaneck Emerging Markets and American Funds 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 American Funds New are associated (or correlated) with Vaneck Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaneck Emerging Markets has no effect on the direction of American Funds i.e., American Funds and Vaneck Emerging go up and down completely randomly.
Pair Corralation between American Funds and Vaneck Emerging
Assuming the 90 days horizon American Funds New is expected to generate 0.75 times more return on investment than Vaneck Emerging. However, American Funds New is 1.33 times less risky than Vaneck Emerging. It trades about 0.06 of its potential returns per unit of risk. Vaneck Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 7,698 in American Funds New on October 20, 2024 and sell it today you would earn a total of 49.00 from holding American Funds New or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds New vs. Vaneck Emerging Markets
Performance |
| Timeline |
| American Funds New |
| Vaneck Emerging Markets |
American Funds and Vaneck Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Vaneck Emerging
The main advantage of trading using opposite American Funds and Vaneck Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Vaneck 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 Vaneck Emerging will offset losses from the drop in Vaneck Emerging's long position.| American Funds vs. Upright Growth Income | American Funds vs. T Rowe Price | American Funds vs. T Rowe Price | American Funds vs. Small Pany Growth |
| Vaneck Emerging vs. Invesco Vertible Securities | Vaneck Emerging vs. Virtus Convertible | Vaneck Emerging vs. Advent Claymore Convertible | Vaneck Emerging vs. Franklin Vertible Securities |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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