Correlation Between Shelton Emerging and Federated Global
Can any of the company-specific risk be diversified away by investing in both Shelton Emerging and Federated Global 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 Shelton Emerging and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelton Emerging Markets and Federated Global Total, you can compare the effects of market volatilities on Shelton Emerging and Federated Global 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 Shelton Emerging with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelton Emerging and Federated Global.
Diversification Opportunities for Shelton Emerging and Federated Global
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shelton and Federated is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Shelton Emerging Markets and Federated Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global Total and Shelton 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 Shelton Emerging Markets are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global Total has no effect on the direction of Shelton Emerging i.e., Shelton Emerging and Federated Global go up and down completely randomly.
Pair Corralation between Shelton Emerging and Federated Global
Assuming the 90 days horizon Shelton Emerging Markets is expected to generate 2.21 times more return on investment than Federated Global. However, Shelton Emerging is 2.21 times more volatile than Federated Global Total. It trades about 0.01 of its potential returns per unit of risk. Federated Global Total is currently generating about 0.01 per unit of risk. If you would invest 1,646 in Shelton Emerging Markets on September 2, 2024 and sell it today you would earn a total of 70.00 from holding Shelton Emerging Markets or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelton Emerging Markets vs. Federated Global Total
Performance |
| Timeline |
| Shelton Emerging Markets |
| Federated Global Total |
Shelton Emerging and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelton Emerging and Federated Global
The main advantage of trading using opposite Shelton Emerging and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelton Emerging position performs unexpectedly, Federated Global 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 Global will offset losses from the drop in Federated Global's long position.The idea behind Shelton Emerging Markets and Federated Global Total pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Federated Global vs. Federated Emerging Market | Federated Global vs. Federated Mdt All | Federated Global vs. Federated Mdt Balanced | Federated Global vs. Federated Global Allocation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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