Correlation Between Aew Real and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Aew Real and Investec Emerging 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 Aew Real and Investec Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aew Real Estate and Investec Emerging Markets, you can compare the effects of market volatilities on Aew Real and Investec Emerging 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 Aew Real with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aew Real and Investec Emerging.
Diversification Opportunities for Aew Real and Investec Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aew and Investec is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Aew Real Estate and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Aew Real 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 Aew Real Estate are associated (or correlated) with Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Aew Real i.e., Aew Real and Investec Emerging go up and down completely randomly.
Pair Corralation between Aew Real and Investec Emerging
Assuming the 90 days horizon Aew Real is expected to generate 2.99 times less return on investment than Investec Emerging. But when comparing it to its historical volatility, Aew Real Estate is 1.08 times less risky than Investec Emerging. It trades about 0.05 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Investec Emerging Markets on March 29, 2025 and sell it today you would earn a total of 131.00 from holding Investec Emerging Markets or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aew Real Estate vs. Investec Emerging Markets
Performance |
| Timeline |
| Aew Real Estate |
| Investec Emerging Markets |
Aew Real and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aew Real and Investec Emerging
The main advantage of trading using opposite Aew Real and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aew Real position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Aew Real vs. Growth Portfolio Class | Aew Real vs. Guidemark Large Cap | Aew Real vs. Ab Global Bond | Aew Real vs. Old Westbury Large |
| Investec Emerging vs. Aew Real Estate | Investec Emerging vs. Prudential Real Estate | Investec Emerging vs. Short Real Estate | Investec Emerging vs. Baron Real Estate |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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