Correlation Between Federated Emerging and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Federated Emerging and Ashmore 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 Emerging and Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Federated Emerging and Ashmore 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 Emerging with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Emerging and Ashmore Emerging.
Diversification Opportunities for Federated Emerging and Ashmore Emerging
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Ashmore is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Federated Emerging Market and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Federated Emerging i.e., Federated Emerging and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Federated Emerging and Ashmore Emerging
Assuming the 90 days horizon Federated Emerging is expected to generate 1.88 times less return on investment than Ashmore Emerging. But when comparing it to its historical volatility, Federated Emerging Market is 1.29 times less risky than Ashmore Emerging. It trades about 0.04 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 799.00 in Ashmore Emerging Markets on January 20, 2024 and sell it today you would earn a total of 10.00 from holding Ashmore Emerging Markets or generate 1.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 97.67% |
Values | Daily Returns |
Federated Emerging Market vs. Ashmore Emerging Markets
Performance |
Timeline |
Federated Emerging Market |
Ashmore Emerging Markets |
Federated Emerging and Ashmore Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Emerging and Ashmore Emerging
The main advantage of trading using opposite Federated Emerging and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Emerging position performs unexpectedly, Ashmore 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging'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 |
Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
CEOs Directory Screen CEOs from public companies around the world | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |