Correlation Between IProfile Emerging and Accelerate Arbitrage

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

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

Diversification Opportunities for IProfile Emerging and Accelerate Arbitrage

0.88

Correlation Coefficient

IProfile Emerging  Accelerate Arbitrage

Very poor diversification

The 3 months correlation between IProfile and Accelerate is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding iProfile Emerging Markets and Accelerate Arbitrage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Arbitrage and IProfile 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 iProfile Emerging Markets are associated (or correlated) with Accelerate Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Arbitrage has no effect on the direction of IProfile Emerging i.e., IProfile Emerging and Accelerate Arbitrage go up and down completely randomly.

Pair Corralation between IProfile Emerging and Accelerate Arbitrage

Assuming the 90 days trading horizon iProfile Emerging Markets is expected to generate 1.39 times more return on investment than Accelerate Arbitrage. However, IProfile Emerging is 1.39 times more volatile than Accelerate Arbitrage. It trades about 0.31 of its potential returns per unit of risk. Accelerate Arbitrage is currently generating about 0.13 per unit of risk. If you would invest  3,944  in iProfile Emerging Markets on April 24, 2025 and sell it today you would earn a total of  602.00  from holding iProfile Emerging Markets or generate 15.26% return on investment over 90 days.

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

iProfile Emerging Markets  vs.  Accelerate Arbitrage

iProfile Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iProfile Emerging Markets are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. Despite quite weak essential indicators, IProfile Emerging disclosed solid returns over the last few months and may actually be approaching a breakup point.

Accelerate Arbitrage

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Accelerate Arbitrage are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, Accelerate Arbitrage is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with IProfile Emerging and Accelerate Arbitrage

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

The idea behind iProfile Emerging Markets and Accelerate Arbitrage 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.