Correlation Between Vanguard Emerging and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard 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 Vanguard 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 Vanguard Emerging Markets and Federated Emerging Market, you can compare the effects of market volatilities on Vanguard 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 Vanguard Emerging with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Emerging and Federated Emerging.
Diversification Opportunities for Vanguard Emerging and Federated Emerging
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Federated is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Emerging Markets 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 Vanguard 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 Vanguard Emerging Markets 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 Vanguard Emerging i.e., Vanguard Emerging and Federated Emerging go up and down completely randomly.
Pair Corralation between Vanguard Emerging and Federated Emerging
Assuming the 90 days horizon Vanguard Emerging Markets is expected to generate 2.89 times more return on investment than Federated Emerging. However, Vanguard Emerging is 2.89 times more volatile than Federated Emerging Market. It trades about 0.27 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.23 per unit of risk. If you would invest 2,774 in Vanguard Emerging Markets on November 27, 2024 and sell it today you would earn a total of 109.00 from holding Vanguard Emerging Markets or generate 3.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Emerging Markets vs. Federated Emerging Market
Performance |
| Timeline |
| Vanguard Emerging Markets |
| Federated Emerging Market |
Vanguard Emerging and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Emerging and Federated Emerging
The main advantage of trading using opposite Vanguard Emerging and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard 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.| Vanguard Emerging vs. Jhancock Diversified Macro | Vanguard Emerging vs. Franklin Federal Limited Term | Vanguard Emerging vs. Rbc Emerging Markets | Vanguard Emerging vs. Aqr Sustainable Long Short |
| Federated Emerging vs. Glg Intl Small | Federated Emerging vs. Guidemark E Fixed | Federated Emerging vs. Shelton Emerging Markets | Federated 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |