Correlation Between International Investors and Global Hard
Can any of the company-specific risk be diversified away by investing in both International Investors and Global Hard 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 Investors and Global Hard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Global Hard Assets, you can compare the effects of market volatilities on International Investors and Global Hard 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 Investors with a short position of Global Hard. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Global Hard.
Diversification Opportunities for International Investors and Global Hard
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Global is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Global Hard Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Hard Assets and International Investors 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 Investors Gold are associated (or correlated) with Global Hard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Hard Assets has no effect on the direction of International Investors i.e., International Investors and Global Hard go up and down completely randomly.
Pair Corralation between International Investors and Global Hard
Assuming the 90 days horizon International Investors Gold is expected to generate 1.75 times more return on investment than Global Hard. However, International Investors is 1.75 times more volatile than Global Hard Assets. It trades about 0.28 of its potential returns per unit of risk. Global Hard Assets is currently generating about 0.0 per unit of risk. If you would invest 1,140 in International Investors Gold on November 27, 2024 and sell it today you would earn a total of 107.00 from holding International Investors Gold or generate 9.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Global Hard Assets
Performance |
| Timeline |
| International Investors |
| Global Hard Assets |
International Investors and Global Hard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Global Hard
The main advantage of trading using opposite International Investors and Global Hard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors position performs unexpectedly, Global Hard 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 Global Hard will offset losses from the drop in Global Hard's long position.| International Investors vs. Tfa Alphagen Growth | International Investors vs. Barings Active Short | International Investors vs. T Rowe Price | International Investors vs. Intal High Relative |
| Global Hard vs. Cm Modity Index | Global Hard vs. Cm Modity Index | Global Hard vs. Unconstrained Emerging Markets | Global Hard vs. Unconstrained 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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