Correlation Between Emerging Markets and Advantage Portfolio
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Advantage Portfolio 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 Advantage Portfolio 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 Advantage Portfolio Class, you can compare the effects of market volatilities on Emerging Markets and Advantage Portfolio 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 Advantage Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Advantage Portfolio.
Diversification Opportunities for Emerging Markets and Advantage Portfolio
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerging and Advantage is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Equity and Advantage Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Portfolio Class 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 Advantage Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Portfolio Class has no effect on the direction of Emerging Markets i.e., Emerging Markets and Advantage Portfolio go up and down completely randomly.
Pair Corralation between Emerging Markets and Advantage Portfolio
Assuming the 90 days horizon Emerging Markets Equity is expected to under-perform the Advantage Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Emerging Markets Equity is 1.51 times less risky than Advantage Portfolio. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Advantage Portfolio Class is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,966 in Advantage Portfolio Class on September 12, 2024 and sell it today you would earn a total of 197.00 from holding Advantage Portfolio Class or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Equity vs. Advantage Portfolio Class
Performance |
| Timeline |
| Emerging Markets Equity |
| Advantage Portfolio Class |
Emerging Markets and Advantage Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Advantage Portfolio
The main advantage of trading using opposite Emerging Markets and Advantage Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Advantage Portfolio 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 Advantage Portfolio will offset losses from the drop in Advantage Portfolio's long position.| Emerging Markets vs. Technology Ultrasector Profund | Emerging Markets vs. Science Technology Fund | Emerging Markets vs. Global Technology Portfolio | Emerging Markets vs. Blackrock Science Technology |
| Advantage Portfolio vs. Goldman Sachs Clean | Advantage Portfolio vs. Sprott Gold Equity | Advantage Portfolio vs. Europac Gold Fund | Advantage Portfolio vs. International Investors Gold |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |