Correlation Between Emerging Markets and Us Real
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Us Real 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 Emerging Markets and Us Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Portfolio and Us Real Estate, you can compare the effects of market volatilities on Emerging Markets and Us Real 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 Emerging Markets with a short position of Us Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Us Real.
Diversification Opportunities for Emerging Markets and Us Real
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Emerging and MSUSX is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio and Us Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Real Estate and Emerging Markets 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 Emerging Markets Portfolio are associated (or correlated) with Us Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Real Estate has no effect on the direction of Emerging Markets i.e., Emerging Markets and Us Real go up and down completely randomly.
Pair Corralation between Emerging Markets and Us Real
Assuming the 90 days horizon Emerging Markets Portfolio is expected to under-perform the Us Real. In addition to that, Emerging Markets is 2.73 times more volatile than Us Real Estate. It trades about -0.2 of its total potential returns per unit of risk. Us Real Estate is currently generating about 0.08 per unit of volatility. If you would invest 1,022 in Us Real Estate on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Us Real Estate or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Emerging Markets Portfolio vs. Us Real Estate
Performance |
| Timeline |
| Emerging Markets Por |
| Us Real Estate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Emerging Markets and Us Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Us Real
The main advantage of trading using opposite Emerging Markets and Us Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Us Real 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 Real will offset losses from the drop in Us Real's long position.| Emerging Markets vs. Vanguard Emerging Markets | Emerging Markets vs. Vanguard Emerging Markets | Emerging Markets vs. Vanguard Emerging Markets | Emerging Markets vs. American Funds New |
| Us Real vs. Amg Managers Centersquare | Us Real vs. Fidelity Real Estate | Us Real vs. Guggenheim Risk Managed | Us Real vs. Commonwealth Real Estate |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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