Correlation Between Wasatch Greater and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Wasatch Greater and Wasatch 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 Wasatch Greater and Wasatch Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Greater China and Wasatch Emerging India, you can compare the effects of market volatilities on Wasatch Greater and Wasatch 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 Wasatch Greater with a short position of Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Greater and Wasatch Emerging.
Diversification Opportunities for Wasatch Greater and Wasatch Emerging
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wasatch and Wasatch is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Greater China and Wasatch Emerging India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging India and Wasatch Greater 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 Wasatch Greater China are associated (or correlated) with Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging India has no effect on the direction of Wasatch Greater i.e., Wasatch Greater and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Wasatch Greater and Wasatch Emerging
Assuming the 90 days horizon Wasatch Greater China is expected to under-perform the Wasatch Emerging. In addition to that, Wasatch Greater is 2.0 times more volatile than Wasatch Emerging India. It trades about -0.1 of its total potential returns per unit of risk. Wasatch Emerging India is currently generating about -0.03 per unit of volatility. If you would invest 696.00 in Wasatch Emerging India on September 1, 2024 and sell it today you would lose (4.00) from holding Wasatch Emerging India or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wasatch Greater China vs. Wasatch Emerging India
Performance |
| Timeline |
| Wasatch Greater China |
| Wasatch Emerging India |
Wasatch Greater and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Greater and Wasatch Emerging
The main advantage of trading using opposite Wasatch Greater and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Greater position performs unexpectedly, Wasatch 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.| Wasatch Greater vs. Wasatch Global Opportunities | Wasatch Greater vs. Wasatch Emerging India | Wasatch Greater vs. Wasatch Micro Cap | Wasatch Greater vs. Wasatch Emerging Markets |
| Wasatch Emerging vs. Matthews India Fund | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. iShares MSCI India |
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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