Correlation Between Investec Emerging and Us Government
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Us Government 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 Us Government 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 Us Government Securities, you can compare the effects of market volatilities on Investec Emerging and Us Government 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Us Government.
Diversification Opportunities for Investec Emerging and Us Government
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Investec and UGSDX is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Investec Emerging i.e., Investec Emerging and Us Government go up and down completely randomly.
Pair Corralation between Investec Emerging and Us Government
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 6.27 times more return on investment than Us Government. However, Investec Emerging is 6.27 times more volatile than Us Government Securities. It trades about 0.09 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.11 per unit of risk. If you would invest 859.00 in Investec Emerging Markets on September 24, 2024 and sell it today you would earn a total of 223.00 from holding Investec Emerging Markets or generate 25.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Investec Emerging Markets vs. Us Government Securities
Performance |
Timeline |
Investec Emerging Markets |
Us Government Securities |
Investec Emerging and Us Government Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Investec Emerging and Us Government
The main advantage of trading using opposite Investec Emerging and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.Investec Emerging vs. Ninety One Global | Investec Emerging vs. Investec Global Franchise | Investec Emerging vs. Investec Global Franchise | Investec Emerging vs. Ninety One International |
Us Government vs. Origin Emerging Markets | Us Government vs. Nasdaq 100 2x Strategy | Us Government vs. Black Oak Emerging | Us Government 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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