Correlation Between High Yield and Federated High
Can any of the company-specific risk be diversified away by investing in both High Yield and Federated High 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 High Yield and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Yield Fund Investor and Federated High Yield, you can compare the effects of market volatilities on High Yield and Federated High 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 High Yield with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Yield and Federated High.
Diversification Opportunities for High Yield and Federated High
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between High and Federated is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding High Yield Fund Investor and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and High Yield 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 High Yield Fund Investor are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of High Yield i.e., High Yield and Federated High go up and down completely randomly.
Pair Corralation between High Yield and Federated High
Assuming the 90 days horizon High Yield is expected to generate 1.98 times less return on investment than Federated High. But when comparing it to its historical volatility, High Yield Fund Investor is 1.24 times less risky than Federated High. It trades about 0.14 of its potential returns per unit of risk. Federated High Yield is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 639.00 in Federated High Yield on August 27, 2024 and sell it today you would earn a total of 5.00 from holding Federated High Yield or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Yield Fund Investor vs. Federated High Yield
Performance |
| Timeline |
| High Yield Fund |
| Federated High Yield |
High Yield and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Yield and Federated High
The main advantage of trading using opposite High Yield and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Yield position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| High Yield vs. High Yield Municipal Fund | High Yield vs. Diversified Bond Fund | High Yield vs. Ginnie Mae Fund | High Yield vs. Utilities Fund Investor |
| Federated High vs. Janus High Yield Fund | Federated High vs. Northeast Investors Trust | Federated High vs. High Yield Fund Investor | Federated High vs. Ab Sustainable Thematic |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |