Correlation Between Investec Emerging and Global Infrastructure
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Global Infrastructure 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 Infrastructure 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 Infrastructure Fund, you can compare the effects of market volatilities on Investec Emerging and Global Infrastructure 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 Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Global Infrastructure.
Diversification Opportunities for Investec Emerging and Global Infrastructure
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Investec and Global is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Global Infrastructure Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Infrastructure 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 Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Infrastructure has no effect on the direction of Investec Emerging i.e., Investec Emerging and Global Infrastructure go up and down completely randomly.
Pair Corralation between Investec Emerging and Global Infrastructure
Assuming the 90 days horizon Investec Emerging is expected to generate 2.21 times less return on investment than Global Infrastructure. In addition to that, Investec Emerging is 1.57 times more volatile than Global Infrastructure Fund. It trades about 0.04 of its total potential returns per unit of risk. Global Infrastructure Fund is currently generating about 0.13 per unit of volatility. If you would invest 877.00 in Global Infrastructure Fund on September 1, 2024 and sell it today you would earn a total of 94.00 from holding Global Infrastructure Fund or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Investec Emerging Markets vs. Global Infrastructure Fund
Performance |
| Timeline |
| Investec Emerging Markets |
| Global Infrastructure |
Investec Emerging and Global Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Global Infrastructure
The main advantage of trading using opposite Investec Emerging and Global Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Global Infrastructure 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 Infrastructure will offset losses from the drop in Global Infrastructure's long position.| Investec Emerging vs. Qs Large Cap | Investec Emerging vs. Americafirst Large Cap | Investec Emerging vs. T Rowe Price | Investec Emerging vs. Virtus Nfj Large Cap |
| Global Infrastructure vs. Franklin Emerging Market | Global Infrastructure vs. Investec Emerging Markets | Global Infrastructure vs. Black Oak Emerging | Global Infrastructure vs. Goldman Sachs Emerging |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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