Correlation Between Investec Emerging and Sa Real

Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Sa Real 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 Sa Real 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 Sa Real Estate, you can compare the effects of market volatilities on Investec Emerging and Sa Real 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 Sa Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Sa Real.

Diversification Opportunities for Investec Emerging and Sa Real

0.65

Correlation Coefficient

Investec Emerging  Sa Real

Poor diversification

The 3 months correlation between Investec and SAREX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Sa Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Real Estate 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 Sa Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Real Estate has no effect on the direction of Investec Emerging i.e., Investec Emerging and Sa Real go up and down completely randomly.

Pair Corralation between Investec Emerging and Sa Real

Assuming the 90 days horizon Investec Emerging Markets is expected to generate 0.97 times more return on investment than Sa Real. However, Investec Emerging Markets is 1.03 times less risky than Sa Real. It trades about 0.09 of its potential returns per unit of risk. Sa Real Estate is currently generating about 0.03 per unit of risk. If you would invest  1,070  in Investec Emerging Markets on December 27, 2024 and sell it today you would earn a total of  56.00  from holding Investec Emerging Markets or generate 5.23% return on investment over 90 days.

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

Investec Emerging Markets  vs.  Sa Real Estate

Investec Emerging Markets

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Investec Emerging Markets are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Investec Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sa Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sa Real Estate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Sa Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Investec Emerging and Sa Real

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

The idea behind Investec Emerging Markets and Sa Real Estate 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.