Correlation Between Johcm Emerging and Us Government
Can any of the company-specific risk be diversified away by investing in both Johcm Emerging and Us Government 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 Johcm Emerging and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Johcm Emerging Markets and Us Government Securities, you can compare the effects of market volatilities on Johcm Emerging and Us Government 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 Johcm Emerging with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johcm Emerging and Us Government.
Diversification Opportunities for Johcm Emerging and Us Government
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Johcm and UGSFX is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Johcm Emerging Markets and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Johcm Emerging 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 Johcm Emerging Markets are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Johcm Emerging i.e., Johcm Emerging and Us Government go up and down completely randomly.
Pair Corralation between Johcm Emerging and Us Government
Assuming the 90 days horizon Johcm Emerging Markets is expected to generate 1.94 times more return on investment than Us Government. However, Johcm Emerging is 1.94 times more volatile than Us Government Securities. It trades about 0.04 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.02 per unit of risk. If you would invest 1,021 in Johcm Emerging Markets on August 30, 2024 and sell it today you would earn a total of 147.00 from holding Johcm Emerging Markets or generate 14.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Johcm Emerging Markets vs. Us Government Securities
Performance |
| Timeline |
| Johcm Emerging Markets |
| Us Government Securities |
Johcm Emerging and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Johcm Emerging and Us Government
The main advantage of trading using opposite Johcm Emerging and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Johcm Emerging position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Johcm Emerging vs. Franklin Adjustable Government | Johcm Emerging vs. Government Securities Fund | Johcm Emerging vs. Inverse Government Long | Johcm Emerging vs. Dws Government Money |
| Us Government vs. Us Government Securities | Us Government vs. American Funds Government | Us Government vs. Vanguard Mortgage Backed Securities | Us Government vs. Vanguard Gnma 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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