Correlation Between Investec Emerging and Ab Equity
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Ab Equity 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 Investec Emerging and Ab Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Ab Equity Income, you can compare the effects of market volatilities on Investec Emerging and Ab Equity 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 Investec Emerging with a short position of Ab Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Ab Equity.
Diversification Opportunities for Investec Emerging and Ab Equity
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Investec and AUIAX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Ab Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Equity Income and Investec Emerging 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 Investec Emerging Markets are associated (or correlated) with Ab Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Equity Income has no effect on the direction of Investec Emerging i.e., Investec Emerging and Ab Equity go up and down completely randomly.
Pair Corralation between Investec Emerging and Ab Equity
Assuming the 90 days horizon Investec Emerging is expected to generate 1.0 times less return on investment than Ab Equity. In addition to that, Investec Emerging is 1.68 times more volatile than Ab Equity Income. It trades about 0.13 of its total potential returns per unit of risk. Ab Equity Income is currently generating about 0.22 per unit of volatility. If you would invest 3,622 in Ab Equity Income on August 13, 2025 and sell it today you would earn a total of 101.00 from holding Ab Equity Income or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Investec Emerging Markets vs. Ab Equity Income
Performance |
| Timeline |
| Investec Emerging Markets |
| Ab Equity Income |
Investec Emerging and Ab Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Ab Equity
The main advantage of trading using opposite Investec Emerging and Ab Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Ab Equity 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 Ab Equity will offset losses from the drop in Ab Equity's long position.| Investec Emerging vs. Sp Smallcap 600 | Investec Emerging vs. Scout Small Cap | Investec Emerging vs. Aqr Small Cap | Investec Emerging vs. Kinetics Small Cap |
| Ab Equity vs. Technology Ultrasector Profund | Ab Equity vs. Red Oak Technology | Ab Equity vs. Fidelity Advisor Technology | Ab Equity vs. Invesco Technology 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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