Correlation Between Origin Emerging and Westwood Market
Can any of the company-specific risk be diversified away by investing in both Origin Emerging and Westwood Market 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 Westwood Market 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 Westwood Market Neutral, you can compare the effects of market volatilities on Origin Emerging and Westwood Market 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 Westwood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and Westwood Market.
Diversification Opportunities for Origin Emerging and Westwood Market
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Origin and Westwood is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and Westwood Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwood Market Neutral 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 Westwood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwood Market Neutral has no effect on the direction of Origin Emerging i.e., Origin Emerging and Westwood Market go up and down completely randomly.
Pair Corralation between Origin Emerging and Westwood Market
Assuming the 90 days horizon Origin Emerging Markets is expected to under-perform the Westwood Market. But the mutual fund apears to be less risky and, when comparing its historical volatility, Origin Emerging Markets is 2.14 times less risky than Westwood Market. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Westwood Market Neutral is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 966.00 in Westwood Market Neutral on October 25, 2024 and sell it today you would earn a total of 7.00 from holding Westwood Market Neutral or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.22% |
| Values | Daily Returns |
Origin Emerging Markets vs. Westwood Market Neutral
Performance |
| Timeline |
| Origin Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Westwood Market Neutral |
Origin Emerging and Westwood Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and Westwood Market
The main advantage of trading using opposite Origin Emerging and Westwood Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging position performs unexpectedly, Westwood Market 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 Westwood Market will offset losses from the drop in Westwood Market's long position.| Origin Emerging vs. Payden Government Fund | Origin Emerging vs. Us Government Securities | Origin Emerging vs. Intermediate Government Bond | Origin Emerging vs. Franklin Adjustable Government |
| Westwood Market vs. Legg Mason Global | Westwood Market vs. Ab Global Bond | Westwood Market vs. Qs Global Equity | Westwood Market vs. Aqr Global Macro |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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