Correlation Between Amana Developing and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Amana Developing and Vanguard 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 Amana Developing and Vanguard Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amana Developing World and Vanguard Emerging Markets, you can compare the effects of market volatilities on Amana Developing and Vanguard 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 Amana Developing with a short position of Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Vanguard Emerging.
Diversification Opportunities for Amana Developing and Vanguard Emerging
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Amana and Vanguard is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding AMANA DEVELOPING WORLD and VANGUARD EMERGING MARKETS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets and Amana Developing 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 Amana Developing World are associated (or correlated) with Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Amana Developing i.e., Amana Developing and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Amana Developing and Vanguard Emerging
Assuming the 90 days horizon Amana Developing World is expected to generate 1.48 times more return on investment than Vanguard Emerging. However, Amana Developing is 1.48 times more volatile than Vanguard Emerging Markets. It trades about 0.23 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about 0.18 per unit of risk. If you would invest 1,265 in Amana Developing World on December 30, 2023 and sell it today you would earn a total of 50.00 from holding Amana Developing World or generate 3.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
AMANA DEVELOPING WORLD vs. VANGUARD EMERGING MARKETS
Performance |
Timeline |
Amana Developing World |
Vanguard Emerging Markets |
Amana Developing and Vanguard Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amana Developing and Vanguard Emerging
The main advantage of trading using opposite Amana Developing and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, Vanguard 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.Amana Developing vs. Vanguard Emerging Markets | Amana Developing vs. Vanguard Emerging Markets | Amana Developing vs. Vanguard Emerging Markets | Amana Developing vs. Vanguard Emerging Markets |
Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. Vanguard Emerging Markets | Vanguard Emerging vs. American Funds New |
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.
Other Complementary Tools
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |