Correlation Between Pear Tree and Acadian Emerging
Can any of the company-specific risk be diversified away by investing in both Pear Tree and Acadian Emerging 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 Pear Tree and Acadian Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pear Tree Polaris and Acadian Emerging Markets, you can compare the effects of market volatilities on Pear Tree and Acadian Emerging 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 Pear Tree with a short position of Acadian Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pear Tree and Acadian Emerging.
Diversification Opportunities for Pear Tree and Acadian Emerging
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pear and Acadian is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pear Tree Polaris and Acadian Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Emerging Markets and Pear Tree 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 Pear Tree Polaris are associated (or correlated) with Acadian Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Emerging Markets has no effect on the direction of Pear Tree i.e., Pear Tree and Acadian Emerging go up and down completely randomly.
Pair Corralation between Pear Tree and Acadian Emerging
Assuming the 90 days horizon Pear Tree Polaris is expected to generate 1.02 times more return on investment than Acadian Emerging. However, Pear Tree is 1.02 times more volatile than Acadian Emerging Markets. It trades about -0.14 of its potential returns per unit of risk. Acadian Emerging Markets is currently generating about -0.18 per unit of risk. If you would invest 2,413 in Pear Tree Polaris on August 26, 2024 and sell it today you would lose (53.00) from holding Pear Tree Polaris or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pear Tree Polaris vs. Acadian Emerging Markets
Performance |
| Timeline |
| Pear Tree Polaris |
| Acadian Emerging Markets |
Pear Tree and Acadian Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pear Tree and Acadian Emerging
The main advantage of trading using opposite Pear Tree and Acadian Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pear Tree position performs unexpectedly, Acadian Emerging 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 Acadian Emerging will offset losses from the drop in Acadian Emerging's long position.| Pear Tree vs. Loomis Sayles Growth | Pear Tree vs. Edgewood Growth Fund | Pear Tree vs. Nuance Mid Cap | Pear Tree vs. Parnassus Mid Cap |
| Acadian Emerging vs. Driehaus Emerging Markets | Acadian Emerging vs. Oakmark International Small | Acadian Emerging vs. T Rowe Price | Acadian Emerging vs. Emerging Markets 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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