Correlation Between Ep Emerging and Weitz Balanced

Can any of the company-specific risk be diversified away by investing in both Ep Emerging and Weitz Balanced 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 Ep Emerging and Weitz Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ep Emerging Markets and Weitz Balanced, you can compare the effects of market volatilities on Ep Emerging and Weitz Balanced 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 Ep Emerging with a short position of Weitz Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Weitz Balanced.

Diversification Opportunities for Ep Emerging and Weitz Balanced

-0.13

Correlation Coefficient

Ep Emerging  Weitz Balanced

Good diversification

The 3 months correlation between EPEIX and Weitz is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Weitz Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weitz Balanced and Ep 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 Ep Emerging Markets are associated (or correlated) with Weitz Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weitz Balanced has no effect on the direction of Ep Emerging i.e., Ep Emerging and Weitz Balanced go up and down completely randomly.

Pair Corralation between Ep Emerging and Weitz Balanced

Assuming the 90 days horizon Ep Emerging is expected to generate 1.16 times less return on investment than Weitz Balanced. In addition to that, Ep Emerging is 3.3 times more volatile than Weitz Balanced. It trades about 0.02 of its total potential returns per unit of risk. Weitz Balanced is currently generating about 0.06 per unit of volatility. If you would invest  1,762  in Weitz Balanced on September 12, 2024 and sell it today you would earn a total of  21.00  from holding Weitz Balanced or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ep Emerging Markets  vs.  Weitz Balanced

Ep Emerging Markets

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ep Emerging Markets are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Ep Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Weitz Balanced

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Weitz Balanced are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Weitz Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ep Emerging and Weitz Balanced

The main advantage of trading using opposite Ep Emerging and Weitz Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Weitz Balanced 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 Weitz Balanced will offset losses from the drop in Weitz Balanced's long position.

The idea behind Ep Emerging Markets and Weitz Balanced pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.