Correlation Between Federated Emerging and Pace Intermediate
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Pace Intermediate 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 Pace Intermediate 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 Pace Intermediate Fixed, you can compare the effects of market volatilities on Federated Emerging and Pace Intermediate 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 Pace Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Pace Intermediate.
Diversification Opportunities for Federated Emerging and Pace Intermediate
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and Pace is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Pace Intermediate Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Intermediate Fixed 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 Pace Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Intermediate Fixed has no effect on the direction of Federated Emerging i.e., Federated Emerging and Pace Intermediate go up and down completely randomly.
Pair Corralation between Federated Emerging and Pace Intermediate
Assuming the 90 days horizon Federated Emerging Market is expected to generate 1.0 times more return on investment than Pace Intermediate. However, Federated Emerging is 1.0 times more volatile than Pace Intermediate Fixed. It trades about 0.11 of its potential returns per unit of risk. Pace Intermediate Fixed is currently generating about 0.05 per unit of risk. If you would invest 650.00 in Federated Emerging Market on August 30, 2024 and sell it today you would earn a total of 141.00 from holding Federated Emerging Market or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Emerging Market vs. Pace Intermediate Fixed
Performance |
| Timeline |
| Federated Emerging Market |
| Pace Intermediate Fixed |
Federated Emerging and Pace Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Emerging and Pace Intermediate
The main advantage of trading using opposite Federated Emerging and Pace Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Pace Intermediate 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 Pace Intermediate will offset losses from the drop in Pace Intermediate's long position.| Federated Emerging vs. HUMANA INC | Federated Emerging vs. Aquagold International | Federated Emerging vs. Barloworld Ltd ADR | Federated Emerging vs. Morningstar Unconstrained Allocation |
| Pace Intermediate vs. T Rowe Price | Pace Intermediate vs. Ep Emerging Markets | Pace Intermediate vs. Barings Emerging Markets | Pace Intermediate vs. Federated Emerging Market |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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