Correlation Between Quantitative Longshort and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort 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 Quantitative Longshort and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Emerging Markets Growth, you can compare the effects of market volatilities on Quantitative Longshort 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 Quantitative Longshort with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Emerging Markets.
Diversification Opportunities for Quantitative Longshort and Emerging Markets
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Quantitative and Emerging is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Emerging Markets Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Growth and Quantitative Longshort 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 Quantitative Longshort Equity 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 Growth has no effect on the direction of Quantitative Longshort i.e., Quantitative Longshort and Emerging Markets go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Emerging Markets
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 0.42 times more return on investment than Emerging Markets. However, Quantitative Longshort Equity is 2.4 times less risky than Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Emerging Markets Growth is currently generating about 0.03 per unit of risk. If you would invest 1,238 in Quantitative Longshort Equity on September 2, 2024 and sell it today you would earn a total of 232.00 from holding Quantitative Longshort Equity or generate 18.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Emerging Markets Growth
Performance |
| Timeline |
| Quantitative Longshort |
| Emerging Markets Growth |
Quantitative Longshort and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Emerging Markets
The main advantage of trading using opposite Quantitative Longshort and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort 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.| Quantitative Longshort vs. The Hartford Small | Quantitative Longshort vs. Small Midcap Dividend Income | Quantitative Longshort vs. Jpmorgan Small Cap | Quantitative Longshort vs. Vanguard Small Cap Growth |
| Emerging Markets vs. Scharf Fund Retail | Emerging Markets vs. Calamos Global Equity | Emerging Markets vs. The Gabelli Equity | Emerging Markets vs. Locorr Dynamic Equity |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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