Correlation Between World Core and World Ex
Can any of the company-specific risk be diversified away by investing in both World Core and World Ex 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 World Core and World Ex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Core Equity and World Ex Val, you can compare the effects of market volatilities on World Core and World Ex 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 World Core with a short position of World Ex. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Core and World Ex.
Diversification Opportunities for World Core and World Ex
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between World and World is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding World Core Equity and World Ex Val in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Ex Val and World Core 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 World Core Equity are associated (or correlated) with World Ex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Ex Val has no effect on the direction of World Core i.e., World Core and World Ex go up and down completely randomly.
Pair Corralation between World Core and World Ex
Assuming the 90 days horizon World Core is expected to generate 1.09 times less return on investment than World Ex. But when comparing it to its historical volatility, World Core Equity is 1.11 times less risky than World Ex. It trades about 0.25 of its potential returns per unit of risk. World Ex Val is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,452 in World Ex Val on May 28, 2025 and sell it today you would earn a total of 156.00 from holding World Ex Val or generate 10.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Core Equity vs. World Ex Val
Performance |
| Timeline |
| World Core Equity |
| World Ex Val |
World Core and World Ex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Core and World Ex
The main advantage of trading using opposite World Core and World Ex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Core position performs unexpectedly, World Ex 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 World Ex will offset losses from the drop in World Ex's long position.| World Core vs. Short Duration Inflation | World Core vs. Great West Inflation Protected Securities | World Core vs. Cref Inflation Linked Bond | World Core vs. Lord Abbett Inflation |
| World Ex vs. Ultra Short Fixed Income | World Ex vs. Enhanced Fixed Income | World Ex vs. Jhancock Global Equity | World Ex vs. Dodge International Stock |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |