Correlation Between Investec Emerging and Inverse Russell
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Inverse Russell 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 Inverse Russell 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 Inverse Russell 2000, you can compare the effects of market volatilities on Investec Emerging and Inverse Russell 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 Inverse Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Inverse Russell.
Diversification Opportunities for Investec Emerging and Inverse Russell
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Investec and Inverse is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Inverse Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inverse Russell 2000 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 Inverse Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inverse Russell 2000 has no effect on the direction of Investec Emerging i.e., Investec Emerging and Inverse Russell go up and down completely randomly.
Pair Corralation between Investec Emerging and Inverse Russell
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 0.48 times more return on investment than Inverse Russell. However, Investec Emerging Markets is 2.08 times less risky than Inverse Russell. It trades about -0.14 of its potential returns per unit of risk. Inverse Russell 2000 is currently generating about -0.28 per unit of risk. If you would invest 1,098 in Investec Emerging Markets on September 2, 2024 and sell it today you would lose (26.00) from holding Investec Emerging Markets or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Inverse Russell 2000
Performance |
| Timeline |
| Investec Emerging Markets |
| Inverse Russell 2000 |
Investec Emerging and Inverse Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Inverse Russell
The main advantage of trading using opposite Investec Emerging and Inverse Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Inverse Russell 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 Inverse Russell will offset losses from the drop in Inverse Russell's long position.| Investec Emerging vs. Barings Global Floating | Investec Emerging vs. Rbc Global Opportunities | Investec Emerging vs. Ms Global Fixed | Investec Emerging vs. Dreyfusstandish Global Fixed |
| Inverse Russell vs. Us Small Cap | Inverse Russell vs. Ab Small Cap | Inverse Russell vs. Kinetics Small Cap | Inverse Russell vs. Chartwell Small Cap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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