Correlation Between Pace International and Federated Emerging
Can any of the company-specific risk be diversified away by investing in both Pace International 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 Pace International and Federated Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Federated Emerging Market, you can compare the effects of market volatilities on Pace International 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 Pace International with a short position of Federated Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Federated Emerging.
Diversification Opportunities for Pace International and Federated Emerging
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Federated is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging 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 Pace International 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 Pace International Emerging 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 Pace International i.e., Pace International and Federated Emerging go up and down completely randomly.
Pair Corralation between Pace International and Federated Emerging
Assuming the 90 days horizon Pace International Emerging is expected to generate 2.78 times more return on investment than Federated Emerging. However, Pace International is 2.78 times more volatile than Federated Emerging Market. It trades about 0.41 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.38 per unit of risk. If you would invest 1,298 in Pace International Emerging on April 19, 2025 and sell it today you would earn a total of 231.00 from holding Pace International Emerging or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Emerging vs. Federated Emerging Market
Performance |
| Timeline |
| Pace International |
| Federated Emerging Market |
Pace International and Federated Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Federated Emerging
The main advantage of trading using opposite Pace International and Federated Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International 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.| Pace International vs. Rbc Emerging Markets | Pace International vs. Sa Emerging Markets | Pace International vs. Blackrock Emerging Markets | Pace International vs. Calvert Emerging Markets |
| Federated Emerging vs. T Rowe Price | Federated Emerging vs. Ab Value Fund | Federated Emerging vs. Balanced Fund Retail | Federated Emerging vs. Shelton Funds |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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