Correlation Between Profunds Large and Investec Emerging

Can any of the company-specific risk be diversified away by investing in both Profunds Large and Investec 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 Profunds Large and Investec Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Profunds Large Cap Growth and Investec Emerging Markets, you can compare the effects of market volatilities on Profunds Large and Investec 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 Profunds Large with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Large and Investec Emerging.

Diversification Opportunities for Profunds Large and Investec Emerging

0.98

Correlation Coefficient

Profunds Large  Investec Emerging

Almost no diversification

The 3 months correlation between Profunds and Investec is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets and Profunds Large 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 Profunds Large Cap Growth are associated (or correlated) with Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Profunds Large i.e., Profunds Large and Investec Emerging go up and down completely randomly.

Pair Corralation between Profunds Large and Investec Emerging

Assuming the 90 days horizon Profunds Large Cap Growth is expected to generate 1.22 times more return on investment than Investec Emerging. However, Profunds Large is 1.22 times more volatile than Investec Emerging Markets. It trades about 0.3 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.24 per unit of risk. If you would invest  3,332  in Profunds Large Cap Growth on May 3, 2025 and sell it today you would earn a total of  565.00  from holding Profunds Large Cap Growth or generate 16.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Profunds Large Cap Growth  vs.  Investec Emerging Markets

Profunds Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Profunds Large Cap Growth are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Profunds Large showed solid returns over the last few months and may actually be approaching a breakup point.

Investec Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Investec Emerging Markets are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Investec Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Profunds Large and Investec Emerging

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

The idea behind Profunds Large Cap Growth and Investec 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.