Correlation Between Emerging Markets and Ftufox
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Ftufox 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 Ftufox 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 Ftufox, you can compare the effects of market volatilities on Emerging Markets and Ftufox 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 Ftufox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Ftufox.
Diversification Opportunities for Emerging Markets and Ftufox
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Emerging and Ftufox is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Bond and Ftufox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ftufox 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 Ftufox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ftufox has no effect on the direction of Emerging Markets i.e., Emerging Markets and Ftufox go up and down completely randomly.
Pair Corralation between Emerging Markets and Ftufox
Assuming the 90 days horizon Emerging Markets Bond is expected to generate 2.33 times more return on investment than Ftufox. However, Emerging Markets is 2.33 times more volatile than Ftufox. It trades about 0.13 of its potential returns per unit of risk. Ftufox is currently generating about 0.08 per unit of risk. If you would invest 4,857 in Emerging Markets Bond on November 5, 2024 and sell it today you would earn a total of 41.00 from holding Emerging Markets Bond or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Emerging Markets Bond vs. Ftufox
Performance |
| Timeline |
| Emerging Markets Bond |
| Ftufox |
Emerging Markets and Ftufox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Ftufox
The main advantage of trading using opposite Emerging Markets and Ftufox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Ftufox 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 Ftufox will offset losses from the drop in Ftufox's long position.| Emerging Markets vs. Tax Free Conservative Income | Emerging Markets vs. Diversified Income Fund | Emerging Markets vs. Guidepath Conservative Income | Emerging Markets vs. Calvert Conservative Allocation |
| Ftufox vs. Ab Small Cap | Ftufox vs. Smallcap Fund Fka | Ftufox vs. Tax Managed Mid Small | Ftufox vs. Glg Intl Small |
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.
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