Correlation Between Amana Developing and Virtus Emerging

Can any of the company-specific risk be diversified away by investing in both Amana Developing and Virtus 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 Virtus 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 Virtus Emerging Markets, you can compare the effects of market volatilities on Amana Developing and Virtus 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 Virtus Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amana Developing and Virtus Emerging.

Diversification Opportunities for Amana Developing and Virtus Emerging

0.0

Correlation Coefficient

Amana Developing  Virtus Emerging

Pay attention - limited upside

The 3 months correlation between Amana and Virtus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amana Developing World and Virtus Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus 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 Virtus Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Emerging Markets has no effect on the direction of Amana Developing i.e., Amana Developing and Virtus Emerging go up and down completely randomly.

Pair Corralation between Amana Developing and Virtus Emerging

If you would invest  1,265  in Amana Developing World on January 29, 2024 and sell it today you would earn a total of  10.00  from holding Amana Developing World or generate 0.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.33%
Values	Daily Returns

Amana Developing World  vs.  Virtus Emerging Markets

Amana Developing World

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amana Developing World are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amana Developing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Virtus Emerging Markets

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Virtus Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Virtus Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amana Developing and Virtus Emerging

The main advantage of trading using opposite Amana Developing and Virtus Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amana Developing position performs unexpectedly, Virtus 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 Virtus Emerging will offset losses from the drop in Virtus Emerging's long position.

The idea behind Amana Developing World and Virtus Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.