Correlation Between Ivy Emerging and Ivy Mid

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Can any of the company-specific risk be diversified away by investing in both Ivy Emerging and Ivy Mid 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 Ivy Emerging and Ivy Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Emerging Markets and Ivy Mid Cap, you can compare the effects of market volatilities on Ivy Emerging and Ivy Mid 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 Ivy Emerging with a short position of Ivy Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Emerging and Ivy Mid.

Diversification Opportunities for Ivy Emerging and Ivy Mid

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Ivy and Ivy is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Emerging Markets and Ivy Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Mid Cap and Ivy 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 Ivy Emerging Markets are associated (or correlated) with Ivy Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Mid Cap has no effect on the direction of Ivy Emerging i.e., Ivy Emerging and Ivy Mid go up and down completely randomly.

Pair Corralation between Ivy Emerging and Ivy Mid

Assuming the 90 days horizon Ivy Emerging is expected to generate 1.46 times less return on investment than Ivy Mid. But when comparing it to its historical volatility, Ivy Emerging Markets is 1.24 times less risky than Ivy Mid. It trades about 0.16 of its potential returns per unit of risk. Ivy Mid Cap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,587  in Ivy Mid Cap on May 5, 2025 and sell it today you would earn a total of  198.00  from holding Ivy Mid Cap or generate 12.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ivy Emerging Markets  vs.  Ivy Mid Cap

 Performance 
       Timeline  
Ivy Emerging Markets 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Emerging Markets are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Ivy Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.
Ivy Mid Cap 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Mid Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Ivy Mid may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ivy Emerging and Ivy Mid Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ivy Emerging and Ivy Mid

The main advantage of trading using opposite Ivy Emerging and Ivy Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Emerging position performs unexpectedly, Ivy Mid 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 Ivy Mid will offset losses from the drop in Ivy Mid's long position.
The idea behind Ivy Emerging Markets and Ivy Mid Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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