Correlation Between Federated Emerging and Federated
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Federated 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 Emerging and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Emerging Market and Federated U S, you can compare the effects of market volatilities on Federated Emerging and Federated 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 Emerging with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Federated.
Diversification Opportunities for Federated Emerging and Federated
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Federated is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S and Federated 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 Federated Emerging Market are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Federated Emerging i.e., Federated Emerging and Federated go up and down completely randomly.
Pair Corralation between Federated Emerging and Federated
Assuming the 90 days horizon Federated Emerging Market is expected to generate 1.51 times more return on investment than Federated. However, Federated Emerging is 1.51 times more volatile than Federated U S. It trades about 0.16 of its potential returns per unit of risk. Federated U S is currently generating about 0.08 per unit of risk. If you would invest 796.00 in Federated Emerging Market on May 30, 2025 and sell it today you would earn a total of 57.00 from holding Federated Emerging Market or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Federated Emerging Market vs. Federated U S
Performance |
| Timeline |
| Federated Emerging Market |
| Federated U S |
Federated Emerging and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Emerging and Federated
The main advantage of trading using opposite Federated Emerging and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Federated Emerging vs. Virtus Seix Government | Federated Emerging vs. Intermediate Government Bond | Federated Emerging vs. Great West Government Mortgage | Federated Emerging vs. Blackrock Government Bond |
| Federated vs. Federated Government Income | Federated vs. Nationwide Fund Institutional | Federated vs. Federated U S | Federated vs. Federated Max Cap 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |