Correlation Between Summit Global and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Summit Global and Investec 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 Summit Global and Investec Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Global Investments and Investec Emerging Markets, you can compare the effects of market volatilities on Summit Global and Investec 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 Summit Global with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Global and Investec Emerging.
Diversification Opportunities for Summit Global and Investec Emerging
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Summit and Investec is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Summit Global Investments and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Summit Global 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 Summit Global Investments are associated (or correlated) with Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Summit Global i.e., Summit Global and Investec Emerging go up and down completely randomly.
Pair Corralation between Summit Global and Investec Emerging
Assuming the 90 days horizon Summit Global Investments is expected to generate 0.43 times more return on investment than Investec Emerging. However, Summit Global Investments is 2.35 times less risky than Investec Emerging. It trades about -0.05 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about -0.09 per unit of risk. If you would invest 4,046 in Summit Global Investments on September 13, 2024 and sell it today you would lose (48.00) from holding Summit Global Investments or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Summit Global Investments vs. Investec Emerging Markets
Performance |
| Timeline |
| Summit Global Investments |
| Investec Emerging Markets |
Summit Global and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Global and Investec Emerging
The main advantage of trading using opposite Summit Global and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Global position performs unexpectedly, Investec 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Summit Global vs. Summit Global Investments | Summit Global vs. Sgi Peak Growth | Summit Global vs. Sgi Prudent Growth | Summit Global vs. Summit Global Investments |
| Investec Emerging vs. Origin Emerging Markets | Investec Emerging vs. Franklin Emerging Market | Investec Emerging vs. Barings Emerging Markets | Investec Emerging vs. Shelton Emerging Markets |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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