Correlation Between Transamerica Emerging and Global Gold
Can any of the company-specific risk be diversified away by investing in both Transamerica Emerging and Global Gold 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 Transamerica Emerging and Global Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Emerging Markets and Global Gold Fund, you can compare the effects of market volatilities on Transamerica Emerging and Global Gold 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 Transamerica Emerging with a short position of Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Emerging and Global Gold.
Diversification Opportunities for Transamerica Emerging and Global Gold
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transamerica and Global is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Emerging Markets and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund and Transamerica Emerging 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 Transamerica Emerging Markets are associated (or correlated) with Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Transamerica Emerging i.e., Transamerica Emerging and Global Gold go up and down completely randomly.
Pair Corralation between Transamerica Emerging and Global Gold
Assuming the 90 days horizon Transamerica Emerging is expected to generate 16.12 times less return on investment than Global Gold. But when comparing it to its historical volatility, Transamerica Emerging Markets is 2.45 times less risky than Global Gold. It trades about 0.01 of its potential returns per unit of risk. Global Gold Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,265 in Global Gold Fund on September 12, 2024 and sell it today you would earn a total of 32.00 from holding Global Gold Fund or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Emerging Markets vs. Global Gold Fund
Performance |
| Timeline |
| Transamerica Emerging |
| Global Gold Fund |
Transamerica Emerging and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Emerging and Global Gold
The main advantage of trading using opposite Transamerica Emerging and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Emerging position performs unexpectedly, Global Gold 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 Gold will offset losses from the drop in Global Gold's long position.| Transamerica Emerging vs. American Funds New | Transamerica Emerging vs. SCOR PK | Transamerica Emerging vs. Morningstar Unconstrained Allocation | Transamerica Emerging vs. Via Renewables |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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