Correlation Between International Business and EMQQ Emerging
Can any of the company-specific risk be diversified away by investing in both International Business and EMQQ 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 International Business and EMQQ Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Business Machines and EMQQ The Emerging, you can compare the effects of market volatilities on International Business and EMQQ 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 International Business with a short position of EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and EMQQ Emerging.
Diversification Opportunities for International Business and EMQQ Emerging
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and EMQQ is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging and International Business 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 International Business Machines are associated (or correlated) with EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of International Business i.e., International Business and EMQQ Emerging go up and down completely randomly.
Pair Corralation between International Business and EMQQ Emerging
Considering the 90-day investment horizon International Business Machines is expected to generate 0.98 times more return on investment than EMQQ Emerging. However, International Business Machines is 1.02 times less risky than EMQQ Emerging. It trades about 0.12 of its potential returns per unit of risk. EMQQ The Emerging is currently generating about 0.05 per unit of risk. If you would invest 14,136 in International Business Machines on August 29, 2024 and sell it today you would earn a total of 8,556 from holding International Business Machines or generate 60.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. EMQQ The Emerging
Performance |
| Timeline |
| International Business |
| EMQQ The Emerging |
International Business and EMQQ Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and EMQQ Emerging
The main advantage of trading using opposite International Business and EMQQ Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business position performs unexpectedly, EMQQ 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 EMQQ Emerging will offset losses from the drop in EMQQ Emerging's long position.| International Business vs. Merck Company | International Business vs. Pharvaris BV | International Business vs. Brinker International | International Business vs. Alcoa Corp |
| EMQQ Emerging vs. Invesco China Technology | EMQQ Emerging vs. Amplify Online Retail | EMQQ Emerging vs. KraneShares CSI China | EMQQ Emerging vs. Global X MSCI |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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