Correlation Between Pacific Funds and China Emerging
Can any of the company-specific risk be diversified away by investing in both Pacific Funds and China 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 Pacific Funds and China Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds Small Cap and China Emerging Leaders, you can compare the effects of market volatilities on Pacific Funds and China 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 Pacific Funds with a short position of China Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and China Emerging.
Diversification Opportunities for Pacific Funds and China Emerging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pacific and China is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds Small Cap and China Emerging Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Emerging Leaders and Pacific Funds 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 Pacific Funds Small Cap are associated (or correlated) with China Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Emerging Leaders has no effect on the direction of Pacific Funds i.e., Pacific Funds and China Emerging go up and down completely randomly.
Pair Corralation between Pacific Funds and China Emerging
If you would invest 1,002 in Pacific Funds Small Cap on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Pacific Funds Small Cap or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 1.56% |
Values | Daily Returns |
Pacific Funds Small Cap vs. China Emerging Leaders
Performance |
Timeline |
Pacific Funds Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Emerging Leaders |
Pacific Funds and China Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pacific Funds and China Emerging
The main advantage of trading using opposite Pacific Funds and China Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds position performs unexpectedly, China 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 China Emerging will offset losses from the drop in China Emerging's long position.Pacific Funds vs. Qs Moderate Growth | Pacific Funds vs. Sa Worldwide Moderate | Pacific Funds vs. Putnman Retirement Ready | Pacific Funds vs. College Retirement Equities |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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