Correlation Between Emerging Markets and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Global Fixed 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 Global Fixed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Equity and Global Fixed Income, you can compare the effects of market volatilities on Emerging Markets and Global Fixed 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 Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Global Fixed.
Diversification Opportunities for Emerging Markets and Global Fixed
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Emerging and Global is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Equity and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed Income 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 Equity are associated (or correlated) with Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Emerging Markets i.e., Emerging Markets and Global Fixed go up and down completely randomly.
Pair Corralation between Emerging Markets and Global Fixed
If you would invest (100.00) in Global Fixed Income on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Global Fixed Income or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Emerging Markets Equity vs. Global Fixed Income
Performance |
| Timeline |
| Emerging Markets Equity |
| Global Fixed Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Emerging Markets and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Global Fixed
The main advantage of trading using opposite Emerging Markets and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Global Fixed 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 Global Fixed will offset losses from the drop in Global Fixed's long position.| Emerging Markets vs. Dreyfusstandish Global Fixed | Emerging Markets vs. Us Global Investors | Emerging Markets vs. T Rowe Price | Emerging Markets vs. Kinetics Global Fund |
| Global Fixed vs. Ab Global Risk | Global Fixed vs. Scharf Global Opportunity | Global Fixed vs. T Rowe Price | Global Fixed vs. Artisan Global Unconstrained |
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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