Correlation Between Emerging Markets and Ab High
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Ab High 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 Ab High 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 Ab High Income, you can compare the effects of market volatilities on Emerging Markets and Ab High 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 Ab High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Ab High.
Diversification Opportunities for Emerging Markets and Ab High
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerging and AGDAX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio and Ab High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab High Income 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 Ab High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab High Income has no effect on the direction of Emerging Markets i.e., Emerging Markets and Ab High go up and down completely randomly.
Pair Corralation between Emerging Markets and Ab High
Assuming the 90 days horizon Emerging Markets Portfolio is expected to generate 2.81 times more return on investment than Ab High. However, Emerging Markets is 2.81 times more volatile than Ab High Income. It trades about 0.23 of its potential returns per unit of risk. Ab High Income is currently generating about 0.32 per unit of risk. If you would invest 2,118 in Emerging Markets Portfolio on September 14, 2024 and sell it today you would earn a total of 55.00 from holding Emerging Markets Portfolio or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Portfolio vs. Ab High Income
Performance |
| Timeline |
| Emerging Markets Por |
| Ab High Income |
Emerging Markets and Ab High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Ab High
The main advantage of trading using opposite Emerging Markets and Ab High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Ab High 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 Ab High will offset losses from the drop in Ab High's long position.| Emerging Markets vs. Ab High Income | Emerging Markets vs. Western Asset High | Emerging Markets vs. Us High Relative | Emerging Markets vs. Needham Aggressive Growth |
| Ab High vs. Ab Global E | Ab High vs. Ab Global E | Ab High vs. Ab Global E | Ab High vs. Ab Minnesota Portfolio |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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