Correlation Between City National and Emerald Insights
Can any of the company-specific risk be diversified away by investing in both City National and Emerald Insights 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 City National and Emerald Insights into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Emerald Insights Fund, you can compare the effects of market volatilities on City National and Emerald Insights 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 City National with a short position of Emerald Insights. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Emerald Insights.
Diversification Opportunities for City National and Emerald Insights
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Emerald is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Emerald Insights Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Insights and City National 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 City National Rochdale are associated (or correlated) with Emerald Insights. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Insights has no effect on the direction of City National i.e., City National and Emerald Insights go up and down completely randomly.
Pair Corralation between City National and Emerald Insights
Assuming the 90 days horizon City National is expected to generate 2.58 times less return on investment than Emerald Insights. But when comparing it to its historical volatility, City National Rochdale is 8.33 times less risky than Emerald Insights. It trades about 0.26 of its potential returns per unit of risk. Emerald Insights Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,699 in Emerald Insights Fund on September 12, 2024 and sell it today you would earn a total of 562.00 from holding Emerald Insights Fund or generate 33.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
City National Rochdale vs. Emerald Insights Fund
Performance |
| Timeline |
| City National Rochdale |
| Emerald Insights |
City National and Emerald Insights Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Emerald Insights
The main advantage of trading using opposite City National and Emerald Insights positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Emerald Insights 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 Emerald Insights will offset losses from the drop in Emerald Insights' long position.| City National vs. Allianzgi Diversified Income | City National vs. Blackrock Conservative Prprdptfinstttnl | City National vs. Lord Abbett Diversified | City National vs. Wealthbuilder Conservative Allocation |
| Emerald Insights vs. City National Rochdale | Emerald Insights vs. Blackrock High Yield | Emerald Insights vs. Neuberger Berman Income | Emerald Insights vs. Guggenheim 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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