Correlation Between Ep Emerging and Us Government
Can any of the company-specific risk be diversified away by investing in both Ep Emerging and Us Government 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 Ep Emerging and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ep Emerging Markets and Us Government Plus, you can compare the effects of market volatilities on Ep Emerging and Us Government 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 Ep Emerging with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ep Emerging and Us Government.
Diversification Opportunities for Ep Emerging and Us Government
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EPASX and GVPIX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets and Us Government Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Plus and Ep 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 Ep Emerging Markets are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Plus has no effect on the direction of Ep Emerging i.e., Ep Emerging and Us Government go up and down completely randomly.
Pair Corralation between Ep Emerging and Us Government
Assuming the 90 days horizon Ep Emerging Markets is expected to generate 0.6 times more return on investment than Us Government. However, Ep Emerging Markets is 1.67 times less risky than Us Government. It trades about -0.17 of its potential returns per unit of risk. Us Government Plus is currently generating about -0.11 per unit of risk. If you would invest 1,016 in Ep Emerging Markets on September 25, 2024 and sell it today you would lose (52.00) from holding Ep Emerging Markets or give up 5.12% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ep Emerging Markets vs. Us Government Plus
Performance |
Timeline |
Ep Emerging Markets |
Us Government Plus |
Ep Emerging and Us Government Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ep Emerging and Us Government
The main advantage of trading using opposite Ep Emerging and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.Ep Emerging vs. Schwab Government Money | Ep Emerging vs. Dreyfus Government Cash | Ep Emerging vs. Inverse Government Long | Ep Emerging vs. Prudential Government Income |
Us Government vs. Pnc Emerging Markets | Us Government vs. Mid Cap 15x Strategy | Us Government vs. Ep Emerging Markets | Us Government vs. Barings Emerging Markets |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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