Correlation Between Investec Emerging and Ab Sustainable
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Ab Sustainable 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 Sustainable 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 Sustainable Thematic, you can compare the effects of market volatilities on Investec Emerging and Ab Sustainable 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 Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Ab Sustainable.
Diversification Opportunities for Investec Emerging and Ab Sustainable
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Investec and SUTAX is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Ab Sustainable Thematic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Sustainable Thematic 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 Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Sustainable Thematic has no effect on the direction of Investec Emerging i.e., Investec Emerging and Ab Sustainable go up and down completely randomly.
Pair Corralation between Investec Emerging and Ab Sustainable
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 0.96 times more return on investment than Ab Sustainable. However, Investec Emerging Markets is 1.05 times less risky than Ab Sustainable. It trades about 0.12 of its potential returns per unit of risk. Ab Sustainable Thematic is currently generating about 0.05 per unit of risk. If you would invest 1,269 in Investec Emerging Markets on May 31, 2025 and sell it today you would earn a total of 26.00 from holding Investec Emerging Markets or generate 2.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Ab Sustainable Thematic
Performance |
| Timeline |
| Investec Emerging Markets |
| Ab Sustainable Thematic |
Investec Emerging and Ab Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Ab Sustainable
The main advantage of trading using opposite Investec Emerging and Ab Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Ab Sustainable 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 Sustainable will offset losses from the drop in Ab Sustainable's long position.| Investec Emerging vs. Federated Government Income | Investec Emerging vs. Aig Government Money | Investec Emerging vs. Short Term Government Fund | Investec Emerging vs. Virtus Seix Government |
| Ab Sustainable vs. Ab Bond Inflation | Ab Sustainable vs. Siit Emerging Markets | Ab Sustainable vs. Artisan High Income | Ab Sustainable vs. Doubleline Low Duration |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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