Correlation Between Investec Emerging and Short-term Municipal
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Short-term Municipal 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 Short-term Municipal 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 Short Term Municipal Bond, you can compare the effects of market volatilities on Investec Emerging and Short-term Municipal 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 Short-term Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Short-term Municipal.
Diversification Opportunities for Investec Emerging and Short-term Municipal
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investec and Short-term is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Short Term Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Term Municipal 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 Short-term Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Term Municipal has no effect on the direction of Investec Emerging i.e., Investec Emerging and Short-term Municipal go up and down completely randomly.
Pair Corralation between Investec Emerging and Short-term Municipal
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 12.58 times more return on investment than Short-term Municipal. However, Investec Emerging is 12.58 times more volatile than Short Term Municipal Bond. It trades about 0.1 of its potential returns per unit of risk. Short Term Municipal Bond is currently generating about 0.08 per unit of risk. If you would invest 1,063 in Investec Emerging Markets on December 29, 2024 and sell it today you would earn a total of 67.00 from holding Investec Emerging Markets or generate 6.3% 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. Short Term Municipal Bond
Performance |
Timeline |
Investec Emerging Markets |
Short Term Municipal |
Investec Emerging and Short-term Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Investec Emerging and Short-term Municipal
The main advantage of trading using opposite Investec Emerging and Short-term Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Short-term Municipal 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 Short-term Municipal will offset losses from the drop in Short-term Municipal's long position.Investec Emerging vs. Prudential Financial Services | Investec Emerging vs. 1919 Financial Services | Investec Emerging vs. John Hancock Financial | Investec Emerging vs. Blackrock Financial Institutions |
Short-term Municipal vs. Aam Select Income | Short-term Municipal vs. Scharf Global Opportunity | Short-term Municipal vs. Arrow Managed Futures | Short-term Municipal vs. Wabmsx |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |