Correlation Between Global Concentrated and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Global Concentrated 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 Global Concentrated and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Centrated Portfolio and Emerging Markets Portfolio, you can compare the effects of market volatilities on Global Concentrated 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 Global Concentrated with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Concentrated and Emerging Markets.
Diversification Opportunities for Global Concentrated and Emerging Markets
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Emerging is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global Centrated Portfolio 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 Global Concentrated 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 Global Centrated Portfolio 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 Global Concentrated i.e., Global Concentrated and Emerging Markets go up and down completely randomly.
Pair Corralation between Global Concentrated and Emerging Markets
Assuming the 90 days horizon Global Centrated Portfolio is expected to generate 1.32 times more return on investment than Emerging Markets. However, Global Concentrated is 1.32 times more volatile than Emerging Markets Portfolio. It trades about 0.11 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.15 per unit of risk. If you would invest 2,330 in Global Centrated Portfolio on April 2, 2025 and sell it today you would earn a total of 285.00 from holding Global Centrated Portfolio or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Global Centrated Portfolio vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Global Centrated Por |
| Emerging Markets Por |
Global Concentrated and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Concentrated and Emerging Markets
The main advantage of trading using opposite Global Concentrated and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Concentrated 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.| Global Concentrated vs. Rationalpier 88 Convertible | Global Concentrated vs. Putnam Convertible Securities | Global Concentrated vs. Lord Abbett Convertible | Global Concentrated vs. Gabelli Convertible And |
| Emerging Markets vs. Fidelity Advisor Gold | Emerging Markets vs. James Balanced Golden | Emerging Markets vs. World Precious Minerals | Emerging Markets vs. First Eagle Gold |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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