Correlation Between Emerald Growth and First Trust/confluence
Can any of the company-specific risk be diversified away by investing in both Emerald Growth and First Trust/confluence 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 Emerald Growth and First Trust/confluence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Growth Fund and First Trustconfluence Small, you can compare the effects of market volatilities on Emerald Growth and First Trust/confluence 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 Emerald Growth with a short position of First Trust/confluence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Growth and First Trust/confluence.
Diversification Opportunities for Emerald Growth and First Trust/confluence
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerald and First is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Growth Fund and First Trustconfluence Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust/confluence and Emerald Growth 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 Emerald Growth Fund are associated (or correlated) with First Trust/confluence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust/confluence has no effect on the direction of Emerald Growth i.e., Emerald Growth and First Trust/confluence go up and down completely randomly.
Pair Corralation between Emerald Growth and First Trust/confluence
Assuming the 90 days horizon Emerald Growth Fund is expected to generate 1.25 times more return on investment than First Trust/confluence. However, Emerald Growth is 1.25 times more volatile than First Trustconfluence Small. It trades about 0.17 of its potential returns per unit of risk. First Trustconfluence Small is currently generating about 0.07 per unit of risk. If you would invest 1,619 in Emerald Growth Fund on September 3, 2024 and sell it today you would earn a total of 244.00 from holding Emerald Growth Fund or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerald Growth Fund vs. First Trustconfluence Small
Performance |
| Timeline |
| Emerald Growth |
| First Trust/confluence |
Emerald Growth and First Trust/confluence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Growth and First Trust/confluence
The main advantage of trading using opposite Emerald Growth and First Trust/confluence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Growth position performs unexpectedly, First Trust/confluence 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 First Trust/confluence will offset losses from the drop in First Trust/confluence's long position.| Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Banking And | Emerald Growth vs. Nuveen Small Cap |
| First Trust/confluence vs. Nuveen Small Cap | First Trust/confluence vs. Emerald Growth Fund | First Trust/confluence vs. Emerald Growth Fund | First Trust/confluence vs. Emerald Growth Fund |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |