Correlation Between Investec Emerging and Global Fixed
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Global Fixed 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 Global Fixed 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 Global Fixed Income, you can compare the effects of market volatilities on Investec Emerging and Global Fixed 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 Global Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Global Fixed.
Diversification Opportunities for Investec Emerging and Global Fixed
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Investec and Global is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Global Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Fixed 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 Global Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Fixed Income has no effect on the direction of Investec Emerging i.e., Investec Emerging and Global Fixed go up and down completely randomly.
Pair Corralation between Investec Emerging and Global Fixed
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 4.5 times more return on investment than Global Fixed. However, Investec Emerging is 4.5 times more volatile than Global Fixed Income. It trades about 0.05 of its potential returns per unit of risk. Global Fixed Income is currently generating about 0.13 per unit of risk. If you would invest 869.00 in Investec Emerging Markets on September 12, 2024 and sell it today you would earn a total of 203.00 from holding Investec Emerging Markets or generate 23.36% 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. Global Fixed Income
Performance |
| Timeline |
| Investec Emerging Markets |
| Global Fixed Income |
Investec Emerging and Global Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Global Fixed
The main advantage of trading using opposite Investec Emerging and Global Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Global Fixed 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 Global Fixed will offset losses from the drop in Global Fixed's long position.| Investec Emerging vs. American Funds New | Investec Emerging vs. SCOR PK | Investec Emerging vs. Morningstar Unconstrained Allocation | Investec Emerging vs. Via Renewables |
| Global Fixed vs. Siit Emerging Markets | Global Fixed vs. Sp Midcap Index | Global Fixed vs. Aqr Long Short Equity | Global Fixed vs. Investec Emerging Markets |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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