Correlation Between Investec Emerging and Federated Total
Can any of the company-specific risk be diversified away by investing in both Investec Emerging and Federated Total 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 Investec Emerging and Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Federated Total Return, you can compare the effects of market volatilities on Investec Emerging and Federated Total 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 Investec Emerging with a short position of Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Federated Total.
Diversification Opportunities for Investec Emerging and Federated Total
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Investec and Federated is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return and Investec 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 Investec Emerging Markets are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Investec Emerging i.e., Investec Emerging and Federated Total go up and down completely randomly.
Pair Corralation between Investec Emerging and Federated Total
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 2.22 times more return on investment than Federated Total. However, Investec Emerging is 2.22 times more volatile than Federated Total Return. It trades about 0.05 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.03 per unit of risk. If you would invest 940.00 in Investec Emerging Markets on September 12, 2024 and sell it today you would earn a total of 132.00 from holding Investec Emerging Markets or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Federated Total Return
Performance |
| Timeline |
| Investec Emerging Markets |
| Federated Total Return |
Investec Emerging and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Federated Total
The main advantage of trading using opposite Investec Emerging and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Investec Emerging vs. American Funds New | Investec Emerging vs. SCOR PK | Investec Emerging vs. Morningstar Unconstrained Allocation | Investec Emerging vs. Via Renewables |
| Federated Total vs. Locorr Market Trend | Federated Total vs. Investec Emerging Markets | Federated Total vs. Kinetics Market Opportunities | Federated Total vs. Sp Midcap Index |
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 Stocks Directory module to find actively traded stocks across global markets.
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