Correlation Between Flaherty Crumrine and Emerging Markets

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

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

Diversification Opportunities for Flaherty Crumrine and Emerging Markets

0.21

Correlation Coefficient

Flaherty Crumrine  Emerging Markets

Modest diversification

The 3 months correlation between Flaherty and Emerging is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Flaherty Crumrine Preferred and Emerging Markets Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Leaders and Flaherty Crumrine 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 Flaherty Crumrine Preferred are associated (or correlated) with Emerging Markets. 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 Leaders has no effect on the direction of Flaherty Crumrine i.e., Flaherty Crumrine and Emerging Markets go up and down completely randomly.

Pair Corralation between Flaherty Crumrine and Emerging Markets

Considering the 90-day investment horizon Flaherty Crumrine Preferred is not expected to generate positive returns. However, Flaherty Crumrine Preferred is 1.3 times less risky than Emerging Markets. It waists most of its returns potential to compensate for thr risk taken. Emerging Markets is generating about 0.02 per unit of risk. If you would invest  1,652  in Emerging Markets Leaders on September 11, 2025 and sell it today you would earn a total of  9.00  from holding Emerging Markets Leaders or generate 0.54% return on investment over 90 days.

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

Flaherty Crumrine Preferred  vs.  Emerging Markets Leaders

Flaherty Crumrine

Risk-Adjusted Performance

Weakest

Over the last 90 days Flaherty Crumrine Preferred has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Flaherty Crumrine is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Emerging Markets Leaders

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Markets Leaders are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Emerging Markets is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Flaherty Crumrine and Emerging Markets

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

The idea behind Flaherty Crumrine Preferred and Emerging Markets Leaders 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.