Correlation Between Flexible Bond and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Flexible Bond 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 Flexible Bond and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Bond Portfolio and Federated Emerging Market, you can compare the effects of market volatilities on Flexible Bond 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 Flexible Bond with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Bond and Federated Emerging.
Diversification Opportunities for Flexible Bond and Federated Emerging
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Flexible and Federated is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Bond Portfolio 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 Flexible Bond 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 Flexible Bond Portfolio 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 Flexible Bond i.e., Flexible Bond and Federated Emerging go up and down completely randomly.
Pair Corralation between Flexible Bond and Federated Emerging
Assuming the 90 days horizon Flexible Bond is expected to generate 1.69 times less return on investment than Federated Emerging. But when comparing it to its historical volatility, Flexible Bond Portfolio is 1.13 times less risky than Federated Emerging. It trades about 0.22 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 852.00 in Federated Emerging Market on August 30, 2025 and sell it today you would earn a total of 38.00 from holding Federated Emerging Market or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Bond Portfolio vs. Federated Emerging Market
Performance |
| Timeline |
| Flexible Bond Portfolio |
| Federated Emerging Market |
Flexible Bond and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Bond and Federated Emerging
The main advantage of trading using opposite Flexible Bond and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Bond 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.| Flexible Bond vs. T Rowe Price | Flexible Bond vs. Vanguard Target Retirement | Flexible Bond vs. Fidelity Managed Retirement | Flexible Bond vs. Nationwide Investor Destinations |
| Federated Emerging vs. Aew Real Estate | Federated Emerging vs. Voya Real Estate | Federated Emerging vs. Pender Real Estate | Federated Emerging vs. Columbia Real Estate |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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