The Emerging Correlations

HCEMX Fund

USD 18.67 0.05 0.27%

The current 90-days correlation between Emerging Markets and Vanguard Total Stock is 0.29 (i.e., Modest diversification). The correlation of The Emerging is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

The Emerging Correlation With Market

Modest diversification

The correlation between The Emerging Markets and DJI is 0.21 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets and DJI in the same portfolio, assuming nothing else is changed.

Check out Risk vs Return Analysis to better understand how to build diversified portfolios, which includes a position in The Emerging Markets. Also, note that the market value of any mutual fund could be closely tied with the direction of predictive economic indicators such as signals in population.

Moving together with The Mutual Fund

0.79	VGTSX	Vanguard Total Inter	Pair Corr
0.8	VTIAX	Vanguard Total Inter	Pair Corr
0.66	NHS	Neuberger Berman High	Pair Corr
0.66	GE	GE Aerospace Fiscal Year End 28th of January 2025	Pair Corr
0.69	MCD	McDonalds Fiscal Year End 3rd of February 2025	Pair Corr
0.86	DD	Dupont De Nemours Fiscal Year End 4th of February 2025	Pair Corr

Moving against The Mutual Fund

0.72

PFHCX

Pacific Funds Small

Pair Corr

Related Correlations Analysis

	VTSAX	VFIAX	VTSMX	VITSX	VSTSX	VSMPX	VFINX	VFFSX	VGTSX	VTIAX
VTSAX		1.0	1.0	1.0	1.0	1.0	1.0	1.0	-0.25	-0.25	VTSAX
VFIAX	1.0		1.0	1.0	1.0	1.0	1.0	1.0	-0.21	-0.21	VFIAX
VTSMX	1.0	1.0		1.0	1.0	1.0	1.0	1.0	-0.25	-0.25	VTSMX
VITSX	1.0	1.0	1.0		1.0	1.0	1.0	1.0	-0.25	-0.25	VITSX
VSTSX	1.0	1.0	1.0	1.0		1.0	1.0	1.0	-0.25	-0.25	VSTSX
VSMPX	1.0	1.0	1.0	1.0	1.0		1.0	1.0	-0.25	-0.25	VSMPX
VFINX	1.0	1.0	1.0	1.0	1.0	1.0		1.0	-0.21	-0.2	VFINX
VFFSX	1.0	1.0	1.0	1.0	1.0	1.0	1.0		-0.21	-0.21	VFFSX
VGTSX	-0.25	-0.21	-0.25	-0.25	-0.25	-0.25	-0.21	-0.21		1.0	VGTSX
VTIAX	-0.25	-0.21	-0.25	-0.25	-0.25	-0.25	-0.2	-0.21	1.0		VTIAX
	VTSAX	VFIAX	VTSMX	VITSX	VSTSX	VSMPX	VFINX	VFFSX	VGTSX	VTIAX

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

VFIAX	+ 1.0	VTSAX
VTSMX	+ 1.0	VTSAX
VITSX	+ 1.0	VTSAX
VSTSX	+ 1.0	VTSAX
VSMPX	+ 1.0	VTSAX
VFINX	+ 1.0	VTSAX

High negative correlations

VTIAX	- 0.25	VSMPX
VGTSX	- 0.25	VSMPX
VTIAX	- 0.25	VSTSX
VGTSX	- 0.25	VSTSX
VTIAX	- 0.25	VITSX
VGTSX	- 0.25	VITSX

Risk-Adjusted Indicators

There is a big difference between The Mutual Fund performing well and The Emerging Mutual Fund doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze The Emerging's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
VTSAX	0.57	0.01	0.00	0.14	0.65	(0.61)	1.10	(1.31)	4.11
VFIAX	0.55	0.01	(0.02)	0.14	0.65	(0.56)	1.17	(1.31)	3.84
VTSMX	0.56	0.01	0.00	0.14	0.65	(0.61)	1.10	(1.31)	4.11
VITSX	0.57	0.01	0.00	0.14	0.65	(0.61)	1.10	(1.31)	4.11
VSTSX	0.57	0.01	0.00	0.14	0.65	(0.61)	1.10	(1.31)	4.11
VSMPX	0.57	0.01	0.00	0.14	0.65	(0.61)	1.10	(1.30)	4.11
VFINX	0.55	0.01	(0.02)	0.14	0.65	(0.57)	1.17	(1.31)	3.84
VFFSX	0.55	0.01	(0.02)	0.14	0.65	(0.56)	1.17	(1.31)	3.84
VGTSX	0.62	(0.09)	0.00	(0.08)	0.00	0.00	1.15	(1.56)	4.09
VTIAX	0.62	(0.09)	0.00	(0.08)	0.00	0.00	1.15	(1.59)	4.11

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