Correlation Between Us Government and Johcm Emerging
Can any of the company-specific risk be diversified away by investing in both Us Government and Johcm 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 Us Government and Johcm Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Plus and Johcm Emerging Markets, you can compare the effects of market volatilities on Us Government and Johcm 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 Us Government with a short position of Johcm Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Johcm Emerging.
Diversification Opportunities for Us Government and Johcm Emerging
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GVPIX and Johcm is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Plus and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets and Us Government 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 Us Government Plus are associated (or correlated) with Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of Us Government i.e., Us Government and Johcm Emerging go up and down completely randomly.
Pair Corralation between Us Government and Johcm Emerging
Assuming the 90 days horizon Us Government Plus is expected to generate 1.41 times more return on investment than Johcm Emerging. However, Us Government is 1.41 times more volatile than Johcm Emerging Markets. It trades about 0.02 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about -0.02 per unit of risk. If you would invest 3,414 in Us Government Plus on September 1, 2024 and sell it today you would earn a total of 92.00 from holding Us Government Plus or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Plus vs. Johcm Emerging Markets
Performance |
| Timeline |
| Us Government Plus |
| Johcm Emerging Markets |
Us Government and Johcm Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Johcm Emerging
The main advantage of trading using opposite Us Government and Johcm Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government position performs unexpectedly, Johcm 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 Johcm Emerging will offset losses from the drop in Johcm Emerging's long position.| Us Government vs. Short Real Estate | Us Government vs. Short Real Estate | Us Government vs. Ultrashort Mid Cap Profund | Us Government vs. Ultrashort Mid Cap Profund |
| Johcm Emerging vs. Us Government Securities | Johcm Emerging vs. Us Government Plus | Johcm Emerging vs. Dreyfus Government Cash | Johcm Emerging vs. Dunham Porategovernment Bond |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |