Correlation Between Asia Opportunity and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Asia Opportunity and Global Fixed 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 Asia Opportunity and Global Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Opportunity Portfolio and Global Fixed Income, you can compare the effects of market volatilities on Asia Opportunity and Global Fixed 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 Asia Opportunity with a short position of Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Opportunity and Global Fixed.
Diversification Opportunities for Asia Opportunity and Global Fixed
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asia and Global is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Asia Opportunity Portfolio and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income and Asia Opportunity 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 Asia Opportunity Portfolio are associated (or correlated) with Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Asia Opportunity i.e., Asia Opportunity and Global Fixed go up and down completely randomly.
Pair Corralation between Asia Opportunity and Global Fixed
Assuming the 90 days horizon Asia Opportunity Portfolio is expected to under-perform the Global Fixed. In addition to that, Asia Opportunity is 5.23 times more volatile than Global Fixed Income. It trades about -0.29 of its total potential returns per unit of risk. Global Fixed Income is currently generating about 0.17 per unit of volatility. If you would invest 513.00 in Global Fixed Income on October 22, 2024 and sell it today you would earn a total of 3.00 from holding Global Fixed Income or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Opportunity Portfolio vs. Global Fixed Income
Performance |
| Timeline |
| Asia Opportunity Por |
| Global Fixed Income |
Asia Opportunity and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Opportunity and Global Fixed
The main advantage of trading using opposite Asia Opportunity and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Opportunity position performs unexpectedly, Global Fixed 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 Fixed will offset losses from the drop in Global Fixed's long position.| Asia Opportunity vs. Pace Select Advisors | Asia Opportunity vs. Franklin Government Money | Asia Opportunity vs. Hsbc Treasury Money | Asia Opportunity vs. Bbh Trust |
| Global Fixed vs. Deutsche Health And | Global Fixed vs. Tekla Healthcare Investors | Global Fixed vs. Lord Abbett Health | Global Fixed vs. Eventide Healthcare Life |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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