Correlation Between Federated Emerging and Ultraemerging Markets
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Ultraemerging Markets 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 Ultraemerging Markets 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 Ultraemerging Markets Profund, you can compare the effects of market volatilities on Federated Emerging and Ultraemerging Markets 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 Ultraemerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Ultraemerging Markets.
Diversification Opportunities for Federated Emerging and Ultraemerging Markets
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Ultraemerging is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Ultraemerging Markets Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultraemerging Markets 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 Ultraemerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultraemerging Markets has no effect on the direction of Federated Emerging i.e., Federated Emerging and Ultraemerging Markets go up and down completely randomly.
Pair Corralation between Federated Emerging and Ultraemerging Markets
Assuming the 90 days horizon Federated Emerging is expected to generate 5.45 times less return on investment than Ultraemerging Markets. But when comparing it to its historical volatility, Federated Emerging Market is 11.36 times less risky than Ultraemerging Markets. It trades about 0.34 of its potential returns per unit of risk. Ultraemerging Markets Profund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 6,618 in Ultraemerging Markets Profund on July 20, 2025 and sell it today you would earn a total of 1,796 from holding Ultraemerging Markets Profund or generate 27.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Emerging Market vs. Ultraemerging Markets Profund
Performance |
| Timeline |
| Federated Emerging Market |
| Ultraemerging Markets |
Federated Emerging and Ultraemerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Emerging and Ultraemerging Markets
The main advantage of trading using opposite Federated Emerging and Ultraemerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Ultraemerging Markets 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 Ultraemerging Markets will offset losses from the drop in Ultraemerging Markets' long position.| Federated Emerging vs. Shelton Emerging Markets | Federated Emerging vs. Angel Oak Multi Strategy | Federated Emerging vs. Western Assets Emerging | Federated Emerging vs. Franklin Emerging Market |
| Ultraemerging Markets vs. Davis Financial Fund | Ultraemerging Markets vs. 1919 Financial Services | Ultraemerging Markets vs. Financial Industries Fund | Ultraemerging Markets vs. Fidelity Advisor 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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