Correlation Between Federated Pennsylvania and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania and Ashmore 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 Pennsylvania and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Pennsylvania Municipal and Ashmore Emerging Markets, you can compare the effects of market volatilities on Federated Pennsylvania and Ashmore 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 Pennsylvania with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Ashmore Emerging.
Diversification Opportunities for Federated Pennsylvania and Ashmore Emerging
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FEDERATED and Ashmore is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets and Federated Pennsylvania 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 Pennsylvania Municipal are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Ashmore Emerging
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 0.84 times more return on investment than Ashmore Emerging. However, Federated Pennsylvania Municipal is 1.19 times less risky than Ashmore Emerging. It trades about 0.2 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest 1,004 in Federated Pennsylvania Municipal on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Federated Pennsylvania Municipal or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Federated Pennsylvania |
| Ashmore Emerging Markets |
Federated Pennsylvania and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Ashmore Emerging
The main advantage of trading using opposite Federated Pennsylvania and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania position performs unexpectedly, Ashmore 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| Federated Pennsylvania vs. Federated Emerging Market | Federated Pennsylvania vs. Federated Mdt All | Federated Pennsylvania vs. Federated Mdt Balanced | Federated Pennsylvania vs. Federated Global Allocation |
| Ashmore Emerging vs. American Funds Inflation | Ashmore Emerging vs. Tiaa Cref Inflation Linked Bond | Ashmore Emerging vs. T Rowe Price | Ashmore Emerging vs. Arrow Managed Futures |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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