Correlation Between Investec Emerging and Intermediate Government
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Intermediate Government 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 Intermediate Government 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 Intermediate Government Bond, you can compare the effects of market volatilities on Investec Emerging and Intermediate Government 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 Intermediate Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Intermediate Government.
Diversification Opportunities for Investec Emerging and Intermediate Government
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Investec and Intermediate is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Intermediate Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Government 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 Intermediate Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Government has no effect on the direction of Investec Emerging i.e., Investec Emerging and Intermediate Government go up and down completely randomly.
Pair Corralation between Investec Emerging and Intermediate Government
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 5.36 times more return on investment than Intermediate Government. However, Investec Emerging is 5.36 times more volatile than Intermediate Government Bond. It trades about 0.16 of its potential returns per unit of risk. Intermediate Government Bond is currently generating about 0.3 per unit of risk. If you would invest 1,272 in Investec Emerging Markets on May 28, 2025 and sell it today you would earn a total of 34.00 from holding Investec Emerging Markets or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Intermediate Government Bond
Performance |
| Timeline |
| Investec Emerging Markets |
| Intermediate Government |
Investec Emerging and Intermediate Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Intermediate Government
The main advantage of trading using opposite Investec Emerging and Intermediate Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Intermediate Government 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 Intermediate Government will offset losses from the drop in Intermediate Government's long position.| Investec Emerging vs. Icon Natural Resources | Investec Emerging vs. Jennison Natural Resources | Investec Emerging vs. Gmo Resources | Investec Emerging vs. Invesco Energy Fund |
| Intermediate Government vs. Legg Mason Global | Intermediate Government vs. Templeton Global Balanced | Intermediate Government vs. Dws Global Macro | Intermediate Government vs. Leuthold Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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