Correlation Between Bts Tactical and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Bts Tactical 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 Bts Tactical and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bts Tactical Fixed and Emerging Markets Equity, you can compare the effects of market volatilities on Bts Tactical 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 Bts Tactical with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bts Tactical and Emerging Markets.
Diversification Opportunities for Bts Tactical and Emerging Markets
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bts and Emerging is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Bts Tactical Fixed and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity and Bts Tactical 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 Bts Tactical Fixed 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 Equity has no effect on the direction of Bts Tactical i.e., Bts Tactical and Emerging Markets go up and down completely randomly.
Pair Corralation between Bts Tactical and Emerging Markets
Assuming the 90 days horizon Bts Tactical is expected to generate 6.17 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Bts Tactical Fixed is 3.2 times less risky than Emerging Markets. It trades about 0.18 of its potential returns per unit of risk. Emerging Markets Equity is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 972.00 in Emerging Markets Equity on April 25, 2025 and sell it today you would earn a total of 161.00 from holding Emerging Markets Equity or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bts Tactical Fixed vs. Emerging Markets Equity
Performance |
| Timeline |
| Bts Tactical Fixed |
| Emerging Markets Equity |
Bts Tactical and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bts Tactical and Emerging Markets
The main advantage of trading using opposite Bts Tactical and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bts Tactical 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.| Bts Tactical vs. Fidelity Capital Income | Bts Tactical vs. Pace High Yield | Bts Tactical vs. Six Circles Credit | Bts Tactical vs. Artisan High Income |
| Emerging Markets vs. Metropolitan West High | Emerging Markets vs. Needham Aggressive Growth | Emerging Markets vs. Prudential High Yield | Emerging Markets vs. Barings High Yield |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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