Correlation Between Federated Kaufmann and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Transamerica 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 Kaufmann and Transamerica Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Kaufmann Large and Transamerica Emerging Markets, you can compare the effects of market volatilities on Federated Kaufmann and Transamerica 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 Kaufmann with a short position of Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Transamerica Emerging.
Diversification Opportunities for Federated Kaufmann and Transamerica Emerging
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Transamerica is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging and Federated Kaufmann 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 Kaufmann Large are associated (or correlated) with Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Transamerica Emerging
Assuming the 90 days horizon Federated Kaufmann Large is expected to under-perform the Transamerica Emerging. In addition to that, Federated Kaufmann is 2.85 times more volatile than Transamerica Emerging Markets. It trades about -0.03 of its total potential returns per unit of risk. Transamerica Emerging Markets is currently generating about 0.03 per unit of volatility. If you would invest 750.00 in Transamerica Emerging Markets on September 12, 2024 and sell it today you would earn a total of 69.00 from holding Transamerica Emerging Markets or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Federated Kaufmann Large |
| Transamerica Emerging |
Federated Kaufmann and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Transamerica Emerging
The main advantage of trading using opposite Federated Kaufmann and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Transamerica 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.| Federated Kaufmann vs. Transamerica Emerging Markets | Federated Kaufmann vs. Dws Emerging Markets | Federated Kaufmann vs. Black Oak Emerging | Federated Kaufmann vs. Ep Emerging Markets |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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