Correlation Between SPDR Portfolio and EMQQ Emerging
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and EMQQ 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 SPDR Portfolio and EMQQ Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio Emerging and EMQQ The Emerging, you can compare the effects of market volatilities on SPDR Portfolio and EMQQ 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 SPDR Portfolio with a short position of EMQQ Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and EMQQ Emerging.
Diversification Opportunities for SPDR Portfolio and EMQQ Emerging
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and EMQQ is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio Emerging and EMQQ The Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMQQ The Emerging and SPDR Portfolio 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 SPDR Portfolio Emerging are associated (or correlated) with EMQQ Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMQQ The Emerging has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and EMQQ Emerging go up and down completely randomly.
Pair Corralation between SPDR Portfolio and EMQQ Emerging
Given the investment horizon of 90 days SPDR Portfolio Emerging is expected to under-perform the EMQQ Emerging. But the etf apears to be less risky and, when comparing its historical volatility, SPDR Portfolio Emerging is 1.34 times less risky than EMQQ Emerging. The etf trades about -0.19 of its potential returns per unit of risk. The EMQQ The Emerging is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 3,893 in EMQQ The Emerging on August 29, 2024 and sell it today you would lose (109.00) from holding EMQQ The Emerging or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio Emerging vs. EMQQ The Emerging
Performance |
| Timeline |
| SPDR Portfolio Emerging |
| EMQQ The Emerging |
SPDR Portfolio and EMQQ Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and EMQQ Emerging
The main advantage of trading using opposite SPDR Portfolio and EMQQ Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, EMQQ 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 EMQQ Emerging will offset losses from the drop in EMQQ Emerging's long position.| SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Russell Small |
| EMQQ Emerging vs. Invesco China Technology | EMQQ Emerging vs. Amplify Online Retail | EMQQ Emerging vs. KraneShares CSI China | EMQQ Emerging vs. Global X MSCI |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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