Correlation Between Origin Emerging and New World
Can any of the company-specific risk be diversified away by investing in both Origin Emerging and New World 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 Origin Emerging and New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Origin Emerging Markets and New World Fund, you can compare the effects of market volatilities on Origin Emerging and New World 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 Origin Emerging with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Origin Emerging and New World.
Diversification Opportunities for Origin Emerging and New World
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Origin and New is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Origin Emerging Markets and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund and Origin 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 Origin Emerging Markets are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Origin Emerging i.e., Origin Emerging and New World go up and down completely randomly.
Pair Corralation between Origin Emerging and New World
Assuming the 90 days horizon Origin Emerging Markets is expected to generate 0.99 times more return on investment than New World. However, Origin Emerging Markets is 1.01 times less risky than New World. It trades about 0.09 of its potential returns per unit of risk. New World Fund is currently generating about -0.08 per unit of risk. If you would invest 1,008 in Origin Emerging Markets on January 26, 2024 and sell it today you would earn a total of 13.00 from holding Origin Emerging Markets or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Origin Emerging Markets vs. New World Fund
Performance |
| Timeline |
| Origin Emerging Markets |
| New World Fund |
Origin Emerging and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Origin Emerging and New World
The main advantage of trading using opposite Origin Emerging and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Origin Emerging position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Origin Emerging vs. Amana Income Fund | Origin Emerging vs. Amana Growth Fund | Origin Emerging vs. Amana Participation Fund | Origin Emerging vs. HUMANA INC |
| New World vs. Amana Income Fund | New World vs. Amana Growth Fund | New World vs. Amana Participation Fund | New World vs. HUMANA INC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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