Correlation Between Origin Emerging and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Origin Emerging and Emerging Markets 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 Origin Emerging and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and Emerging Markets Equity, you can compare the effects of market volatilities on Origin Emerging and Emerging Markets 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 Origin Emerging with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Emerging Markets.
Diversification Opportunities for Origin Emerging and Emerging Markets
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Origin and Emerging is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity and Origin 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 Origin Emerging Markets are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of Origin Emerging i.e., Origin Emerging and Emerging Markets go up and down completely randomly.
Pair Corralation between Origin Emerging and Emerging Markets
Assuming the 90 days horizon Origin Emerging Markets is expected to generate 1.01 times more return on investment than Emerging Markets. However, Origin Emerging is 1.01 times more volatile than Emerging Markets Equity. It trades about 0.06 of its potential returns per unit of risk. Emerging Markets Equity is currently generating about 0.05 per unit of risk. If you would invest 843.00 in Origin Emerging Markets on September 12, 2024 and sell it today you would earn a total of 213.00 from holding Origin Emerging Markets or generate 25.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Emerging Markets vs. Emerging Markets Equity
Performance |
| Timeline |
| Origin Emerging Markets |
| Emerging Markets Equity |
Origin Emerging and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Emerging Markets
The main advantage of trading using opposite Origin Emerging and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Origin Emerging vs. American Funds New | Origin Emerging vs. SCOR PK | Origin Emerging vs. Morningstar Unconstrained Allocation | Origin Emerging vs. Via Renewables |
| Emerging Markets vs. Franklin Emerging Market | Emerging Markets vs. Pace International Emerging | Emerging Markets vs. Origin Emerging Markets | Emerging Markets vs. Mid Cap 15x Strategy |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |