Correlation Between Emerging Markets and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Pear Tree 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 Pear Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Portfolio and Pear Tree Panagora, you can compare the effects of market volatilities on Emerging Markets and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Pear Tree.
Diversification Opportunities for Emerging Markets and Pear Tree
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerging and Pear is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Portfolio and Pear Tree Panagora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Panagora 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 Portfolio are associated (or correlated) with Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Panagora has no effect on the direction of Emerging Markets i.e., Emerging Markets and Pear Tree go up and down completely randomly.
Pair Corralation between Emerging Markets and Pear Tree
If you would invest 2,760 in Emerging Markets Portfolio on September 1, 2024 and sell it today you would lose (7.00) from holding Emerging Markets Portfolio or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Emerging Markets Portfolio vs. Pear Tree Panagora
Performance |
| Timeline |
| Emerging Markets Por |
| Pear Tree Panagora |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Emerging Markets and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Pear Tree
The main advantage of trading using opposite Emerging Markets and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Emerging Markets vs. Prudential Jennison Financial | Emerging Markets vs. Blackrock Financial Institutions | Emerging Markets vs. John Hancock Financial | Emerging Markets vs. Goldman Sachs Financial |
| Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Acadian Emerging Markets | Pear Tree vs. Driehaus Emerging Markets | Pear Tree 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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