Correlation Between Horizon Us and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Horizon Us and Investec 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 Horizon Us and Investec Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Defensive Equity and Investec Emerging Markets, you can compare the effects of market volatilities on Horizon Us and Investec 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 Horizon Us with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Us and Investec Emerging.
Diversification Opportunities for Horizon Us and Investec Emerging
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Horizon and Investec is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Defensive Equity and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Horizon Us 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 Horizon Defensive Equity are associated (or correlated) with Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Horizon Us i.e., Horizon Us and Investec Emerging go up and down completely randomly.
Pair Corralation between Horizon Us and Investec Emerging
Assuming the 90 days horizon Horizon Defensive Equity is expected to generate 0.73 times more return on investment than Investec Emerging. However, Horizon Defensive Equity is 1.36 times less risky than Investec Emerging. It trades about 0.44 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about -0.14 per unit of risk. If you would invest 3,266 in Horizon Defensive Equity on September 2, 2024 and sell it today you would earn a total of 176.00 from holding Horizon Defensive Equity or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Defensive Equity vs. Investec Emerging Markets
Performance |
| Timeline |
| Horizon Defensive Equity |
| Investec Emerging Markets |
Horizon Us and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Us and Investec Emerging
The main advantage of trading using opposite Horizon Us and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Us position performs unexpectedly, Investec 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Risk | Horizon Us vs. Horizon Active Asset | Horizon Us vs. Horizon Active Dividend |
| Investec Emerging vs. Barings Global Floating | Investec Emerging vs. Rbc Global Opportunities | Investec Emerging vs. Ms Global Fixed | Investec Emerging vs. Dreyfusstandish Global Fixed |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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