Correlation Between Barings Emerging and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Barings Emerging 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 Barings Emerging and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Federated Emerging Market, you can compare the effects of market volatilities on Barings Emerging 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 Barings Emerging with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Federated Emerging.
Diversification Opportunities for Barings Emerging and Federated Emerging
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barings and Federated is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets 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 Barings 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 Barings Emerging Markets 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 Barings Emerging i.e., Barings Emerging and Federated Emerging go up and down completely randomly.
Pair Corralation between Barings Emerging and Federated Emerging
Assuming the 90 days horizon Barings Emerging is expected to generate 1.44 times less return on investment than Federated Emerging. In addition to that, Barings Emerging is 1.05 times more volatile than Federated Emerging Market. It trades about 0.08 of its total potential returns per unit of risk. Federated Emerging Market is currently generating about 0.12 per unit of volatility. If you would invest 651.00 in Federated Emerging Market on November 27, 2024 and sell it today you would earn a total of 143.00 from holding Federated Emerging Market or generate 21.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Federated Emerging Market
Performance |
| Timeline |
| Barings Emerging Markets |
| Federated Emerging Market |
Barings Emerging and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Federated Emerging
The main advantage of trading using opposite Barings Emerging and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging 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.| Barings Emerging vs. Rbc Emerging Markets | Barings Emerging vs. Templeton Developing Markets | Barings Emerging vs. Locorr Market Trend | Barings Emerging vs. Calvert Developed Market |
| Federated Emerging vs. Glg Intl Small | Federated Emerging vs. Guidemark E Fixed | Federated Emerging vs. Shelton Emerging Markets | Federated Emerging vs. Arrow Managed Futures |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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