Correlation Between Investec Emerging and Voya Intermediate
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Voya Intermediate 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 Voya Intermediate 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 Voya Intermediate Bond, you can compare the effects of market volatilities on Investec Emerging and Voya Intermediate 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 Voya Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Voya Intermediate.
Diversification Opportunities for Investec Emerging and Voya Intermediate
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Investec and Voya is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Voya Intermediate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Intermediate Bond 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 Voya Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Intermediate Bond has no effect on the direction of Investec Emerging i.e., Investec Emerging and Voya Intermediate go up and down completely randomly.
Pair Corralation between Investec Emerging and Voya Intermediate
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 2.73 times more return on investment than Voya Intermediate. However, Investec Emerging is 2.73 times more volatile than Voya Intermediate Bond. It trades about 0.04 of its potential returns per unit of risk. Voya Intermediate Bond is currently generating about -0.09 per unit of risk. If you would invest 1,066 in Investec Emerging Markets on October 26, 2024 and sell it today you would earn a total of 14.00 from holding Investec Emerging Markets or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Voya Intermediate Bond
Performance |
| Timeline |
| Investec Emerging Markets |
| Voya Intermediate Bond |
Investec Emerging and Voya Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Voya Intermediate
The main advantage of trading using opposite Investec Emerging and Voya Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Voya Intermediate 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 Voya Intermediate will offset losses from the drop in Voya Intermediate's long position.| Investec Emerging vs. Edward Jones Money | Investec Emerging vs. Pioneer Money Market | Investec Emerging vs. Principal Fds Money | Investec Emerging vs. Prudential Government Money |
| Voya Intermediate vs. Western Assets Emerging | Voya Intermediate vs. Artisan Developing World | Voya Intermediate vs. Investec Emerging Markets | Voya Intermediate vs. Pimco Moditiesplus Strategy |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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