Correlation Between Federated Emerging and Pnc International
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Pnc International 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 Pnc International 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 Pnc International Equity, you can compare the effects of market volatilities on Federated Emerging and Pnc International 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 Pnc International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Pnc International.
Diversification Opportunities for Federated Emerging and Pnc International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Pnc is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Pnc International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pnc International Equity 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 Pnc International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pnc International Equity has no effect on the direction of Federated Emerging i.e., Federated Emerging and Pnc International go up and down completely randomly.
Pair Corralation between Federated Emerging and Pnc International
Assuming the 90 days horizon Federated Emerging Market is expected to generate 0.08 times more return on investment than Pnc International. However, Federated Emerging Market is 12.25 times less risky than Pnc International. It trades about -0.11 of its potential returns per unit of risk. Pnc International Equity is currently generating about -0.28 per unit of risk. If you would invest 789.00 in Federated Emerging Market on September 25, 2024 and sell it today you would lose (4.00) from holding Federated Emerging Market or give up 0.51% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Federated Emerging Market vs. Pnc International Equity
Performance |
Timeline |
Federated Emerging Market |
Pnc International Equity |
Federated Emerging and Pnc International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Emerging and Pnc International
The main advantage of trading using opposite Federated Emerging and Pnc International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Pnc International 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 Pnc International will offset losses from the drop in Pnc International's long position.Federated Emerging vs. Federated Mdt All | Federated Emerging vs. Federated Mdt Balanced | Federated Emerging vs. Federated Global Allocation | Federated Emerging vs. Federated Hermes Emerging |
Pnc International vs. Federated Emerging Market | Pnc International vs. Federated Mdt All | Pnc International vs. Federated Mdt Balanced | Pnc International vs. Federated Global Allocation |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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