Correlation Between Long/short Portfolio and International Portfolio
Can any of the company-specific risk be diversified away by investing in both Long/short Portfolio and International Portfolio 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 Long/short Portfolio and International Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longshort Portfolio Longshort and International Portfolio International, you can compare the effects of market volatilities on Long/short Portfolio and International Portfolio 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 Long/short Portfolio with a short position of International Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long/short Portfolio and International Portfolio.
Diversification Opportunities for Long/short Portfolio and International Portfolio
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Long/short and International is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Longshort Portfolio Longshort and International Portfolio Intern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Portfolio and Long/short Portfolio 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 Longshort Portfolio Longshort are associated (or correlated) with International Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Portfolio has no effect on the direction of Long/short Portfolio i.e., Long/short Portfolio and International Portfolio go up and down completely randomly.
Pair Corralation between Long/short Portfolio and International Portfolio
Assuming the 90 days horizon Long/short Portfolio is expected to generate 2.59 times less return on investment than International Portfolio. But when comparing it to its historical volatility, Longshort Portfolio Longshort is 1.45 times less risky than International Portfolio. It trades about 0.1 of its potential returns per unit of risk. International Portfolio International is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,929 in International Portfolio International on September 3, 2025 and sell it today you would earn a total of 139.00 from holding International Portfolio International or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Longshort Portfolio Longshort vs. International Portfolio Intern
Performance |
| Timeline |
| Long/short Portfolio |
| International Portfolio |
Long/short Portfolio and International Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long/short Portfolio and International Portfolio
The main advantage of trading using opposite Long/short Portfolio and International Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long/short Portfolio position performs unexpectedly, International Portfolio 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 International Portfolio will offset losses from the drop in International Portfolio's long position.| Long/short Portfolio vs. Gamco International Growth | Long/short Portfolio vs. Slow Capital Growth | Long/short Portfolio vs. Eagle Growth Income | Long/short Portfolio vs. Auer Growth Fund |
| International Portfolio vs. T Rowe Price | International Portfolio vs. Rational Dividend Capture | International Portfolio vs. Franklin Emerging Market | International Portfolio vs. Auer Growth Fund |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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