Correlation Between Emerging Markets and Matson Money
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Matson Money 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 Matson Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Bond and Matson Money Equity, you can compare the effects of market volatilities on Emerging Markets and Matson Money 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 Matson Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Matson Money.
Diversification Opportunities for Emerging Markets and Matson Money
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerging and Matson is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Bond and Matson Money Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Money Equity 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 Bond are associated (or correlated) with Matson Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Money Equity has no effect on the direction of Emerging Markets i.e., Emerging Markets and Matson Money go up and down completely randomly.
Pair Corralation between Emerging Markets and Matson Money
Assuming the 90 days horizon Emerging Markets is expected to generate 6.63 times less return on investment than Matson Money. But when comparing it to its historical volatility, Emerging Markets Bond is 4.05 times less risky than Matson Money. It trades about 0.18 of its potential returns per unit of risk. Matson Money Equity is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,495 in Matson Money Equity on September 4, 2024 and sell it today you would earn a total of 292.00 from holding Matson Money Equity or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Emerging Markets Bond vs. Matson Money Equity
Performance |
| Timeline |
| Emerging Markets Bond |
| Matson Money Equity |
Emerging Markets and Matson Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Matson Money
The main advantage of trading using opposite Emerging Markets and Matson Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Matson Money 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 Matson Money will offset losses from the drop in Matson Money's long position.| Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide | Emerging Markets vs. Pimco Rae Worldwide |
| Matson Money vs. Western Asset High | Matson Money vs. T Rowe Price | Matson Money vs. Siit High Yield | Matson Money vs. Calvert High Yield |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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