Correlation Between Investec Emerging and Biotechnology Fund
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Biotechnology Fund 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 Biotechnology Fund 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 Biotechnology Fund Class, you can compare the effects of market volatilities on Investec Emerging and Biotechnology Fund 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 Biotechnology Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Biotechnology Fund.
Diversification Opportunities for Investec Emerging and Biotechnology Fund
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investec and Biotechnology is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Biotechnology Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotechnology Fund Class 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 Biotechnology Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotechnology Fund Class has no effect on the direction of Investec Emerging i.e., Investec Emerging and Biotechnology Fund go up and down completely randomly.
Pair Corralation between Investec Emerging and Biotechnology Fund
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 0.69 times more return on investment than Biotechnology Fund. However, Investec Emerging Markets is 1.45 times less risky than Biotechnology Fund. It trades about 0.13 of its potential returns per unit of risk. Biotechnology Fund Class is currently generating about 0.02 per unit of risk. If you would invest 1,100 in Investec Emerging Markets on March 29, 2025 and sell it today you would earn a total of 125.00 from holding Investec Emerging Markets or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Biotechnology Fund Class
Performance |
| Timeline |
| Investec Emerging Markets |
| Biotechnology Fund Class |
Investec Emerging and Biotechnology Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Biotechnology Fund
The main advantage of trading using opposite Investec Emerging and Biotechnology Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Biotechnology Fund 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 Biotechnology Fund will offset losses from the drop in Biotechnology Fund's long position.| Investec Emerging vs. Aew Real Estate | Investec Emerging vs. Prudential Real Estate | Investec Emerging vs. Short Real Estate | Investec Emerging vs. Baron Real Estate |
| Biotechnology Fund vs. Bbh Intermediate Municipal | Biotechnology Fund vs. Us Government Securities | Biotechnology Fund vs. Inverse Government Long | Biotechnology Fund vs. Access Capital Munity |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |