Correlation Between Us Global and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Us Global and Emerging Markets 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 Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Global Investors and Emerging Markets Equity, you can compare the effects of market volatilities on Us Global and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Emerging Markets.
Diversification Opportunities for Us Global and Emerging Markets
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between USLUX and Emerging is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Investors and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity 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 Investors are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of Us Global i.e., Us Global and Emerging Markets go up and down completely randomly.
Pair Corralation between Us Global and Emerging Markets
Assuming the 90 days horizon Us Global Investors is expected to under-perform the Emerging Markets. In addition to that, Us Global is 1.2 times more volatile than Emerging Markets Equity. It trades about -0.04 of its total potential returns per unit of risk. Emerging Markets Equity is currently generating about 0.25 per unit of volatility. If you would invest 1,348 in Emerging Markets Equity on November 27, 2024 and sell it today you would earn a total of 54.00 from holding Emerging Markets Equity or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Global Investors vs. Emerging Markets Equity
Performance |
| Timeline |
| Us Global Investors |
| Emerging Markets Equity |
Us Global and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Global and Emerging Markets
The main advantage of trading using opposite Us Global and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Global position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Us Global vs. Tfa Alphagen Growth | Us Global vs. Oklahoma College Savings | Us Global vs. T Rowe Price | Us Global vs. The Hartford Growth |
| Emerging Markets vs. Blackrock Health Sciences | Emerging Markets vs. Hartford Healthcare Hls | Emerging Markets vs. Health Care Fund | Emerging Markets vs. Baillie Gifford Health |
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.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |