Correlation Between Federated Global and Abrdn Em
Can any of the company-specific risk be diversified away by investing in both Federated Global and Abrdn Em 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 Federated Global and Abrdn Em into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Abrdn Em Sma, you can compare the effects of market volatilities on Federated Global and Abrdn Em 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 Federated Global with a short position of Abrdn Em. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Abrdn Em.
Diversification Opportunities for Federated Global and Abrdn Em
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Abrdn is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Abrdn Em Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Em Sma and Federated Global 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 Federated Global Allocation are associated (or correlated) with Abrdn Em. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Em Sma has no effect on the direction of Federated Global i.e., Federated Global and Abrdn Em go up and down completely randomly.
Pair Corralation between Federated Global and Abrdn Em
Assuming the 90 days horizon Federated Global Allocation is expected to generate 0.53 times more return on investment than Abrdn Em. However, Federated Global Allocation is 1.87 times less risky than Abrdn Em. It trades about 0.08 of its potential returns per unit of risk. Abrdn Em Sma is currently generating about -0.2 per unit of risk. If you would invest 1,980 in Federated Global Allocation on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Federated Global Allocation or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Abrdn Em Sma
Performance |
| Timeline |
| Federated Global All |
| Abrdn Em Sma |
Federated Global and Abrdn Em Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Abrdn Em
The main advantage of trading using opposite Federated Global and Abrdn Em positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Abrdn Em 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 Abrdn Em will offset losses from the drop in Abrdn Em's long position.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Abrdn Em vs. Abrdn Global Infrastructure | Abrdn Em vs. Abrdn Short Duration | Abrdn Em vs. Prudential Jennison International | Abrdn Em vs. Fidelity New Markets |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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