Correlation Between Guidemark Large and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Guidemark Large 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 Guidemark Large and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Federated Emerging Market, you can compare the effects of market volatilities on Guidemark Large 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 Guidemark Large with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Federated Emerging.
Diversification Opportunities for Guidemark Large and Federated Emerging
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guidemark and Federated is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap 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 Guidemark Large 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 Guidemark Large Cap 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 Guidemark Large i.e., Guidemark Large and Federated Emerging go up and down completely randomly.
Pair Corralation between Guidemark Large and Federated Emerging
Assuming the 90 days horizon Guidemark Large Cap is expected to generate 3.68 times more return on investment than Federated Emerging. However, Guidemark Large is 3.68 times more volatile than Federated Emerging Market. It trades about 0.2 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.47 per unit of risk. If you would invest 1,158 in Guidemark Large Cap on September 14, 2024 and sell it today you would earn a total of 25.00 from holding Guidemark Large Cap or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. Federated Emerging Market
Performance |
| Timeline |
| Guidemark Large Cap |
| Federated Emerging Market |
Guidemark Large and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and Federated Emerging
The main advantage of trading using opposite Guidemark Large and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large 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.| Guidemark Large vs. Tax Free Conservative Income | Guidemark Large vs. Wilmington Diversified Income | Guidemark Large vs. Federated Hermes Conservative | Guidemark Large vs. Fulcrum Diversified Absolute |
| Federated Emerging vs. Guidemark Large Cap | Federated Emerging vs. Cb Large Cap | Federated Emerging vs. Transamerica Large Cap | Federated Emerging vs. Avantis Large Cap |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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