Correlation Between Emerging Markets and Guggenheim World
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Guggenheim World 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 Emerging Markets and Guggenheim World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Guggenheim World Equity, you can compare the effects of market volatilities on Emerging Markets and Guggenheim World 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 Emerging Markets with a short position of Guggenheim World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Guggenheim World.
Diversification Opportunities for Emerging Markets and Guggenheim World
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerging and Guggenheim is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets and Guggenheim World Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim World Equity and Emerging Markets 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 The Emerging Markets are associated (or correlated) with Guggenheim World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim World Equity has no effect on the direction of Emerging Markets i.e., Emerging Markets and Guggenheim World go up and down completely randomly.
Pair Corralation between Emerging Markets and Guggenheim World
Assuming the 90 days horizon The Emerging Markets is expected to generate 2.15 times more return on investment than Guggenheim World. However, Emerging Markets is 2.15 times more volatile than Guggenheim World Equity. It trades about 0.06 of its potential returns per unit of risk. Guggenheim World Equity is currently generating about 0.08 per unit of risk. If you would invest 1,845 in The Emerging Markets on September 12, 2024 and sell it today you would earn a total of 67.00 from holding The Emerging Markets or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
The Emerging Markets vs. Guggenheim World Equity
Performance |
| Timeline |
| Emerging Markets |
| Guggenheim World Equity |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Emerging Markets and Guggenheim World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Guggenheim World
The main advantage of trading using opposite Emerging Markets and Guggenheim World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Guggenheim World 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 Guggenheim World will offset losses from the drop in Guggenheim World's long position.| Emerging Markets vs. Ab Global Risk | Emerging Markets vs. Commonwealth Global Fund | Emerging Markets vs. 361 Global Longshort | Emerging Markets vs. Ab Global Bond |
| Guggenheim World vs. Allianzgi Health Sciences | Guggenheim World vs. The Gabelli Healthcare | Guggenheim World vs. Lord Abbett Health | Guggenheim World vs. Alger Health Sciences |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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