Correlation Between Abrdn Emerging and Federated Investors
Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging and Federated Investors 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 Abrdn Emerging and Federated Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abrdn Emerging Markets and Federated Investors B, you can compare the effects of market volatilities on Abrdn Emerging and Federated Investors 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 Abrdn Emerging with a short position of Federated Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and Federated Investors.
Diversification Opportunities for Abrdn Emerging and Federated Investors
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Abrdn and Federated is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and Federated Investors B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Investors and Abrdn 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 Abrdn Emerging Markets are associated (or correlated) with Federated Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Investors has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Federated Investors go up and down completely randomly.
Pair Corralation between Abrdn Emerging and Federated Investors
Considering the 90-day investment horizon Abrdn Emerging is expected to generate 1.91 times less return on investment than Federated Investors. But when comparing it to its historical volatility, Abrdn Emerging Markets is 1.23 times less risky than Federated Investors. It trades about 0.03 of its potential returns per unit of risk. Federated Investors B is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,441 in Federated Investors B on August 31, 2024 and sell it today you would earn a total of 834.00 from holding Federated Investors B or generate 24.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abrdn Emerging Markets vs. Federated Investors B
Performance |
| Timeline |
| Abrdn Emerging Markets |
| Federated Investors |
Abrdn Emerging and Federated Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abrdn Emerging and Federated Investors
The main advantage of trading using opposite Abrdn Emerging and Federated Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Emerging position performs unexpectedly, Federated Investors 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 Federated Investors will offset losses from the drop in Federated Investors' long position.| Abrdn Emerging vs. DWS Municipal Income | Abrdn Emerging vs. Blackrock Muni Intermediate | Abrdn Emerging vs. Blackrock Muniyield | Abrdn Emerging vs. Flow Capital Corp |
| Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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