Correlation Between Emerging Markets and Emerging Markets

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Emerging Markets 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 Emerging Markets and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Value and Emerging Markets Portfolio, you can compare the effects of market volatilities on Emerging Markets and Emerging Markets 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 Emerging Markets with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Emerging Markets.

Diversification Opportunities for Emerging Markets and Emerging Markets

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Emerging and Emerging is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding EMERGING MARKETS VALUE and EMERGING MARKETS PORTFOLIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Emerging Markets 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 Emerging Markets Value are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Emerging Markets i.e., Emerging Markets and Emerging Markets go up and down completely randomly.

Pair Corralation between Emerging Markets and Emerging Markets

Assuming the 90 days horizon Emerging Markets is expected to generate 1.04 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Emerging Markets Value is 1.12 times less risky than Emerging Markets. It trades about 0.21 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  2,748  in Emerging Markets Portfolio on December 30, 2023 and sell it today you would earn a total of  73.00  from holding Emerging Markets Portfolio or generate 2.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.65%
ValuesDaily Returns

EMERGING MARKETS VALUE  vs.  EMERGING MARKETS PORTFOLIO

 Performance 
       Timeline  
Emerging Markets Value 

Risk-Adjusted Performance

6 of 100

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

Risk-Adjusted Performance

6 of 100

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

Emerging Markets and Emerging Markets Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Emerging Markets and Emerging Markets

The main advantage of trading using opposite Emerging Markets and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.
The idea behind Emerging Markets Value and Emerging Markets Portfolio 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.
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 Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Bonds Directory
Find actively traded corporate debentures issued by US companies