Correlation Between Emerald Growth and Driehaus Micro
Can any of the company-specific risk be diversified away by investing in both Emerald Growth and Driehaus Micro 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 Driehaus Micro 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 Driehaus Micro Cap, you can compare the effects of market volatilities on Emerald Growth and Driehaus Micro 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 Driehaus Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Growth and Driehaus Micro.
Diversification Opportunities for Emerald Growth and Driehaus Micro
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerald and Driehaus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Growth Fund and Driehaus Micro Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driehaus Micro Cap 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 Driehaus Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driehaus Micro Cap has no effect on the direction of Emerald Growth i.e., Emerald Growth and Driehaus Micro go up and down completely randomly.
Pair Corralation between Emerald Growth and Driehaus Micro
Assuming the 90 days horizon Emerald Growth is expected to generate 1.57 times less return on investment than Driehaus Micro. But when comparing it to its historical volatility, Emerald Growth Fund is 1.13 times less risky than Driehaus Micro. It trades about 0.18 of its potential returns per unit of risk. Driehaus Micro Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,399 in Driehaus Micro Cap on August 25, 2024 and sell it today you would earn a total of 153.00 from holding Driehaus Micro Cap or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerald Growth Fund vs. Driehaus Micro Cap
Performance |
| Timeline |
| Emerald Growth |
| Driehaus Micro Cap |
Emerald Growth and Driehaus Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Growth and Driehaus Micro
The main advantage of trading using opposite Emerald Growth and Driehaus Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Growth position performs unexpectedly, Driehaus Micro 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 Driehaus Micro will offset losses from the drop in Driehaus Micro's long position.| Emerald Growth vs. The Chesapeake Growth | Emerald Growth vs. Emerald Banking And | Emerald Growth vs. Hotchkis Wiley Large | Emerald Growth vs. Emerald Growth Fund |
| Driehaus Micro vs. Driehaus Emerging Markets | Driehaus Micro vs. Driehaus Small Cap | Driehaus Micro vs. Driehaus Emerging Markets | Driehaus Micro vs. Driehaus Emerging Markets |
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 Stocks Directory module to find actively traded stocks across global markets.
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