Correlation Between Investec Emerging and Blackrock Global
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Blackrock Global 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 Blackrock Global 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 Blackrock Global Dividend, you can compare the effects of market volatilities on Investec Emerging and Blackrock Global 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 Blackrock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Blackrock Global.
Diversification Opportunities for Investec Emerging and Blackrock Global
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investec and Blackrock is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Blackrock Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Global Dividend 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 Blackrock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Global Dividend has no effect on the direction of Investec Emerging i.e., Investec Emerging and Blackrock Global go up and down completely randomly.
Pair Corralation between Investec Emerging and Blackrock Global
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 1.25 times more return on investment than Blackrock Global. However, Investec Emerging is 1.25 times more volatile than Blackrock Global Dividend. It trades about 0.05 of its potential returns per unit of risk. Blackrock Global Dividend is currently generating about 0.06 per unit of risk. If you would invest 870.00 in Investec Emerging Markets on September 13, 2024 and sell it today you would earn a total of 202.00 from holding Investec Emerging Markets or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Investec Emerging Markets vs. Blackrock Global Dividend
Performance |
| Timeline |
| Investec Emerging Markets |
| Blackrock Global Dividend |
Investec Emerging and Blackrock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Blackrock Global
The main advantage of trading using opposite Investec Emerging and Blackrock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Blackrock Global 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 Blackrock Global will offset losses from the drop in Blackrock Global's long position.| Investec Emerging vs. Origin Emerging Markets | Investec Emerging vs. Franklin Emerging Market | Investec Emerging vs. Barings Emerging Markets | Investec Emerging vs. Shelton Emerging Markets |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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