Correlation Between Extended Market and Short Term
Can any of the company-specific risk be diversified away by investing in both Extended Market and Short Term 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 Extended Market and Short Term into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Short Term Investment Trust, you can compare the effects of market volatilities on Extended Market and Short Term 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 Extended Market with a short position of Short Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Short Term.
Diversification Opportunities for Extended Market and Short Term
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Extended and Short is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Short Term Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Investment and Extended Market 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 Extended Market Index are associated (or correlated) with Short Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Investment has no effect on the direction of Extended Market i.e., Extended Market and Short Term go up and down completely randomly.
Pair Corralation between Extended Market and Short Term
If you would invest 2,310 in Extended Market Index on August 25, 2024 and sell it today you would earn a total of 180.00 from holding Extended Market Index or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Extended Market Index vs. Short Term Investment Trust
Performance |
| Timeline |
| Extended Market Index |
| Short Term Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Extended Market and Short Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Short Term
The main advantage of trading using opposite Extended Market and Short Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market position performs unexpectedly, Short Term 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 Short Term will offset losses from the drop in Short Term's long position.| Extended Market vs. T Rowe Price | Extended Market vs. Touchstone Large Cap | Extended Market vs. Legg Mason Bw | Extended Market vs. Aqr Large Cap |
| Short Term vs. Ultra Short Term Fixed | Short Term vs. Bbh Intermediate Municipal | Short Term vs. Gmo Emerging Country | Short Term vs. Vanguard Global Credit |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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