Correlation Between Federated Global and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Federated Global and Ep 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 Global and Ep Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Ep Emerging Markets, you can compare the effects of market volatilities on Federated Global and Ep 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 Global with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Ep Emerging.
Diversification Opportunities for Federated Global and Ep Emerging
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Federated and EPEIX is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets and Federated Global 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 Global Allocation are associated (or correlated) with Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Federated Global i.e., Federated Global and Ep Emerging go up and down completely randomly.
Pair Corralation between Federated Global and Ep Emerging
Assuming the 90 days horizon Federated Global Allocation is expected to generate 1.02 times more return on investment than Ep Emerging. However, Federated Global is 1.02 times more volatile than Ep Emerging Markets. It trades about 0.1 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.14 per unit of risk. If you would invest 1,964 in Federated Global Allocation on October 25, 2024 and sell it today you would earn a total of 20.00 from holding Federated Global Allocation or generate 1.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Global Allocation vs. Ep Emerging Markets
Performance |
Timeline |
Federated Global All |
Ep Emerging Markets |
Federated Global and Ep Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Global and Ep Emerging
The main advantage of trading using opposite Federated Global and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Ep 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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