Correlation Between Power Floating and The Emerging

Can any of the company-specific risk be diversified away by investing in both Power Floating and The 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 Power Floating and The Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Power Floating Rate and The Emerging Markets, you can compare the effects of market volatilities on Power Floating and The 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 Power Floating with a short position of The Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Floating and The Emerging.

Diversification Opportunities for Power Floating and The Emerging

-0.42

Correlation Coefficient

Power Floating  The Emerging

Very good diversification

The 3 months correlation between Power and The is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Power Floating Rate and The Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Power Floating 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 Power Floating Rate are associated (or correlated) with The Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Power Floating i.e., Power Floating and The Emerging go up and down completely randomly.

Pair Corralation between Power Floating and The Emerging

Assuming the 90 days horizon Power Floating Rate is expected to generate 0.23 times more return on investment than The Emerging. However, Power Floating Rate is 4.41 times less risky than The Emerging. It trades about -0.02 of its potential returns per unit of risk. The Emerging Markets is currently generating about -0.19 per unit of risk. If you would invest  961.00  in Power Floating Rate on October 4, 2024 and sell it today you would lose (3.00) from holding Power Floating Rate or give up 0.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Power Floating Rate  vs.  The Emerging Markets

Power Floating Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Power Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Power Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Power Floating and The Emerging

The main advantage of trading using opposite Power Floating and The Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Floating position performs unexpectedly, The 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 The Emerging will offset losses from the drop in The Emerging's long position.

The idea behind Power Floating Rate and The Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.