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
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and Federated is 0.33. 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 2.56 times more return on investment than Federated Emerging. However, Vanguard Emerging is 2.56 times more volatile than Federated Emerging Market. It trades about 0.07 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.1 per unit of risk. If you would invest 2,598 in Vanguard Emerging Markets on September 1, 2024 and sell it today you would earn a total of 283.00 from holding Vanguard Emerging Markets or generate 10.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.47% |
| 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. Vanguard Materials Index | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Global Minimum |
| Federated Emerging vs. Fidelity Advisor Financial | Federated Emerging vs. 1919 Financial Services | Federated Emerging vs. Mesirow Financial Small | Federated Emerging vs. John Hancock Financial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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