Correlation Between Wasatch International and Wasatch Emerging

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

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

Diversification Opportunities for Wasatch International and Wasatch Emerging

0.99

Correlation Coefficient

Wasatch International  Wasatch Emerging

No risk reduction

The 3 months correlation between Wasatch and Wasatch is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch International Growth and Wasatch Emerging India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging India and Wasatch International 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 Wasatch International Growth are associated (or correlated) with Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging India has no effect on the direction of Wasatch International i.e., Wasatch International and Wasatch Emerging go up and down completely randomly.

Pair Corralation between Wasatch International and Wasatch Emerging

Assuming the 90 days horizon Wasatch International Growth is expected to under-perform the Wasatch Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Wasatch International Growth is 1.01 times less risky than Wasatch Emerging. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Wasatch Emerging India is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  707.00  in Wasatch Emerging India on October 7, 2024 and sell it today you would lose (122.00) from holding Wasatch Emerging India or give up 17.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Wasatch International Growth  vs.  Wasatch Emerging India

Wasatch International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wasatch International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Wasatch Emerging India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wasatch Emerging India has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Wasatch International and Wasatch Emerging

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

The idea behind Wasatch International Growth and Wasatch Emerging India 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.