Correlation Between Investec Emerging and Great West
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Great West 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 Great West 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 Great West Loomis Sayles, you can compare the effects of market volatilities on Investec Emerging and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Great West.
Diversification Opportunities for Investec Emerging and Great West
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Investec and Great is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Investec Emerging i.e., Investec Emerging and Great West go up and down completely randomly.
Pair Corralation between Investec Emerging and Great West
Assuming the 90 days horizon Investec Emerging is expected to generate 3.68 times less return on investment than Great West. In addition to that, Investec Emerging is 1.12 times more volatile than Great West Loomis Sayles. It trades about 0.04 of its total potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.18 per unit of volatility. If you would invest 3,856 in Great West Loomis Sayles on November 5, 2024 and sell it today you would earn a total of 117.00 from holding Great West Loomis Sayles or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Great West Loomis Sayles
Performance |
| Timeline |
| Investec Emerging Markets |
| Great West Loomis |
Investec Emerging and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Great West
The main advantage of trading using opposite Investec Emerging and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Smallcap World Fund | Great West vs. Small Cap Equity | Great West vs. Locorr Dynamic Equity | Great West vs. The Growth Equity |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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