Correlation Between Us Global and Johcm Emerging
Can any of the company-specific risk be diversified away by investing in both Us Global and Johcm 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 Us Global and Johcm Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Global Leaders and Johcm Emerging Markets, you can compare the effects of market volatilities on Us Global and Johcm 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 Us Global with a short position of Johcm Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Johcm Emerging.
Diversification Opportunities for Us Global and Johcm Emerging
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between USGLX and Johcm is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Leaders and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets and Us Global 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 Us Global Leaders are associated (or correlated) with Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of Us Global i.e., Us Global and Johcm Emerging go up and down completely randomly.
Pair Corralation between Us Global and Johcm Emerging
Assuming the 90 days horizon Us Global Leaders is expected to generate 1.08 times more return on investment than Johcm Emerging. However, Us Global is 1.08 times more volatile than Johcm Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about -0.02 per unit of risk. If you would invest 6,590 in Us Global Leaders on September 1, 2024 and sell it today you would earn a total of 1,026 from holding Us Global Leaders or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Us Global Leaders vs. Johcm Emerging Markets
Performance |
| Timeline |
| Us Global Leaders |
| Johcm Emerging Markets |
Us Global and Johcm Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Global and Johcm Emerging
The main advantage of trading using opposite Us Global and Johcm Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Global position performs unexpectedly, Johcm 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 Johcm Emerging will offset losses from the drop in Johcm Emerging's long position.| Us Global vs. Regional Bank Fund | Us Global vs. Regional Bank Fund | Us Global vs. Multimanager Lifestyle Balanced | Us Global vs. Multimanager Lifestyle Servative |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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