Correlation Between Investec Emerging and Ab High
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Ab High 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 Investec Emerging and Ab High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Ab High Income, you can compare the effects of market volatilities on Investec Emerging and Ab High 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 Investec Emerging with a short position of Ab High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Ab High.
Diversification Opportunities for Investec Emerging and Ab High
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Investec and AGDZX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Ab High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab High Income and Investec Emerging 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 Investec Emerging Markets are associated (or correlated) with Ab High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab High Income has no effect on the direction of Investec Emerging i.e., Investec Emerging and Ab High go up and down completely randomly.
Pair Corralation between Investec Emerging and Ab High
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 5.72 times more return on investment than Ab High. However, Investec Emerging is 5.72 times more volatile than Ab High Income. It trades about 0.04 of its potential returns per unit of risk. Ab High Income is currently generating about 0.09 per unit of risk. If you would invest 1,077 in Investec Emerging Markets on November 5, 2024 and sell it today you would earn a total of 8.00 from holding Investec Emerging Markets or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Ab High Income
Performance |
| Timeline |
| Investec Emerging Markets |
| Ab High Income |
Investec Emerging and Ab High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Ab High
The main advantage of trading using opposite Investec Emerging and Ab High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Ab High 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 Ab High will offset losses from the drop in Ab High's long position.| Investec Emerging vs. First Eagle Gold | Investec Emerging vs. Franklin Gold Precious | Investec Emerging vs. Global Gold Fund | Investec Emerging vs. Oppenheimer Gold Special |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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