Correlation Between Black Oak and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Black Oak and Federated 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 Black Oak and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Federated Emerging Market, you can compare the effects of market volatilities on Black Oak and Federated 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 Black Oak with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Federated Emerging.
Diversification Opportunities for Black Oak and Federated Emerging
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Black and FEDERATED is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market and Black Oak 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 Black Oak Emerging are associated (or correlated) with Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Black Oak i.e., Black Oak and Federated Emerging go up and down completely randomly.
Pair Corralation between Black Oak and Federated Emerging
Assuming the 90 days horizon Black Oak Emerging is expected to generate 4.18 times more return on investment than Federated Emerging. However, Black Oak is 4.18 times more volatile than Federated Emerging Market. It trades about 0.07 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.07 per unit of risk. If you would invest 810.00 in Black Oak Emerging on August 29, 2024 and sell it today you would earn a total of 17.00 from holding Black Oak Emerging or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Oak Emerging vs. Federated Emerging Market
Performance |
| Timeline |
| Black Oak Emerging |
| Federated Emerging Market |
Black Oak and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Federated Emerging
The main advantage of trading using opposite Black Oak and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak position performs unexpectedly, Federated 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 Federated Emerging will offset losses from the drop in Federated Emerging's long position.| Black Oak vs. Red Oak Technology | Black Oak vs. Live Oak Health | Black Oak vs. HUMANA INC | Black Oak vs. Aquagold International |
| Federated Emerging vs. Fidelity New Markets | Federated Emerging vs. Fidelity New Markets | Federated Emerging vs. Fidelity New Markets | Federated Emerging vs. HUMANA INC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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