Correlation Between Barings Emerging and Federated Total
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Federated Total 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 Total 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 Total Return, you can compare the effects of market volatilities on Barings Emerging and Federated Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Federated Total.
Diversification Opportunities for Barings Emerging and Federated Total
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Federated is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Barings Emerging i.e., Barings Emerging and Federated Total go up and down completely randomly.
Pair Corralation between Barings Emerging and Federated Total
Assuming the 90 days horizon Barings Emerging Markets is expected to under-perform the Federated Total. In addition to that, Barings Emerging is 1.0 times more volatile than Federated Total Return. It trades about -0.08 of its total potential returns per unit of risk. Federated Total Return is currently generating about 0.08 per unit of volatility. If you would invest 947.00 in Federated Total Return on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Federated Total Return or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Barings Emerging Markets vs. Federated Total Return
Performance |
| Timeline |
| Barings Emerging Markets |
| Federated Total Return |
Barings Emerging and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Federated Total
The main advantage of trading using opposite Barings Emerging and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. SCOR PK |
| Federated Total vs. Metropolitan West Total | Federated Total vs. SCOR PK | Federated Total vs. Morningstar Unconstrained Allocation | Federated Total vs. Thrivent High Yield |
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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