Correlation Between International Fund and International Developed
Can any of the company-specific risk be diversified away by investing in both International Fund and International Developed 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 International Fund and International Developed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Fund International and International Developed Markets, you can compare the effects of market volatilities on International Fund and International Developed 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 International Fund with a short position of International Developed. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Fund and International Developed.
Diversification Opportunities for International Fund and International Developed
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between International and International is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding International Fund Internation and International Developed Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Developed and International Fund 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 International Fund International are associated (or correlated) with International Developed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Developed has no effect on the direction of International Fund i.e., International Fund and International Developed go up and down completely randomly.
Pair Corralation between International Fund and International Developed
Assuming the 90 days horizon International Fund is expected to generate 11.82 times less return on investment than International Developed. In addition to that, International Fund is 1.02 times more volatile than International Developed Markets. It trades about 0.0 of its total potential returns per unit of risk. International Developed Markets is currently generating about 0.02 per unit of volatility. If you would invest 4,388 in International Developed Markets on September 1, 2024 and sell it today you would earn a total of 10.00 from holding International Developed Markets or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Fund Internation vs. International Developed Market
Performance |
| Timeline |
| International Fund |
| International Developed |
International Fund and International Developed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Fund and International Developed
The main advantage of trading using opposite International Fund and International Developed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Fund position performs unexpectedly, International Developed 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 International Developed will offset losses from the drop in International Developed's long position.| International Fund vs. Capital Growth Fund | International Fund vs. Emerging Markets Fund | International Fund vs. High Income Fund | International Fund vs. Growth Income Fund |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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