Correlation Between Investec Emerging and Vanguard Extended
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Vanguard Extended 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 Vanguard Extended 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 Vanguard Extended Market, you can compare the effects of market volatilities on Investec Emerging and Vanguard Extended 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 Vanguard Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Vanguard Extended.
Diversification Opportunities for Investec Emerging and Vanguard Extended
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Investec and Vanguard is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Vanguard Extended Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Extended Market 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 Vanguard Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Extended Market has no effect on the direction of Investec Emerging i.e., Investec Emerging and Vanguard Extended go up and down completely randomly.
Pair Corralation between Investec Emerging and Vanguard Extended
Assuming the 90 days horizon Investec Emerging is expected to generate 1.77 times less return on investment than Vanguard Extended. But when comparing it to its historical volatility, Investec Emerging Markets is 1.28 times less risky than Vanguard Extended. It trades about 0.07 of its potential returns per unit of risk. Vanguard Extended Market is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 26,996 in Vanguard Extended Market on September 12, 2024 and sell it today you would earn a total of 10,755 from holding Vanguard Extended Market or generate 39.84% 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. Vanguard Extended Market
Performance |
| Timeline |
| Investec Emerging Markets |
| Vanguard Extended Market |
Investec Emerging and Vanguard Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Vanguard Extended
The main advantage of trading using opposite Investec Emerging and Vanguard Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Vanguard Extended 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 Vanguard Extended will offset losses from the drop in Vanguard Extended'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 |
| Vanguard Extended vs. Aqr Long Short Equity | Vanguard Extended vs. Kinetics Market Opportunities | Vanguard Extended vs. Pnc Emerging Markets | Vanguard Extended 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |