Correlation Between Federated Emerging and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Investec 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 Federated Emerging and Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Federated Emerging and Investec 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 Federated Emerging with a short position of Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Investec Emerging.
Diversification Opportunities for Federated Emerging and Investec Emerging
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Investec is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Federated Emerging i.e., Federated Emerging and Investec Emerging go up and down completely randomly.
Pair Corralation between Federated Emerging and Investec Emerging
Assuming the 90 days horizon Federated Emerging is expected to generate 2.19 times less return on investment than Investec Emerging. But when comparing it to its historical volatility, Federated Emerging Market is 3.83 times less risky than Investec Emerging. It trades about 0.34 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,266 in Investec Emerging Markets on July 20, 2025 and sell it today you would earn a total of 136.00 from holding Investec Emerging Markets or generate 10.74% 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. Investec Emerging Markets
Performance |
| Timeline |
| Federated Emerging Market |
| Investec Emerging Markets |
Federated Emerging and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Emerging and Investec Emerging
The main advantage of trading using opposite Federated Emerging and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Investec 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 Investec Emerging will offset losses from the drop in Investec Emerging's 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 |
| Investec Emerging vs. Ambrus Core Bond | Investec Emerging vs. T Rowe Price | Investec Emerging vs. Nuveen Strategic Municipal | Investec Emerging vs. Old Westbury Municipal |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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