Correlation Between Federated Emerging and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Federated 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 Federated 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 Federated Emerging Market and Federated Emerging Market, you can compare the effects of market volatilities on Federated 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 Federated Emerging with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Federated Emerging.
Diversification Opportunities for Federated Emerging and Federated Emerging
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Federated is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market 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 Federated 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 Federated Emerging Market 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 Federated Emerging i.e., Federated Emerging and Federated Emerging go up and down completely randomly.
Pair Corralation between Federated Emerging and Federated Emerging
Assuming the 90 days horizon Federated Emerging is expected to generate 1.04 times less return on investment than Federated Emerging. In addition to that, Federated Emerging is 1.02 times more volatile than Federated Emerging Market. It trades about 0.11 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 646.00 in Federated Emerging Market on September 12, 2024 and sell it today you would earn a total of 152.00 from holding Federated Emerging Market or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Emerging Market vs. Federated Emerging Market
Performance |
| Timeline |
| Federated Emerging Market |
| Federated Emerging Market |
Federated Emerging and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Emerging and Federated Emerging
The main advantage of trading using opposite Federated Emerging and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated 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.| Federated Emerging vs. Advent Claymore Convertible | Federated Emerging vs. Calamos Dynamic Convertible | Federated Emerging vs. Lord Abbett Convertible | Federated Emerging vs. Fidelity Sai Convertible |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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