Correlation Between Ab Bond and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Federated Kaufmann 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 Ab Bond and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Federated Kaufmann Small, you can compare the effects of market volatilities on Ab Bond and Federated Kaufmann 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 Ab Bond with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Federated Kaufmann.
Diversification Opportunities for Ab Bond and Federated Kaufmann
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABNCX and Federated is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Ab Bond i.e., Ab Bond and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Ab Bond and Federated Kaufmann
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 0.08 times more return on investment than Federated Kaufmann. However, Ab Bond Inflation is 13.05 times less risky than Federated Kaufmann. It trades about 0.15 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about -0.13 per unit of risk. If you would invest 1,000.00 in Ab Bond Inflation on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Ab Bond Inflation or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Bond Inflation vs. Federated Kaufmann Small
Performance |
| Timeline |
| Ab Bond Inflation |
| Federated Kaufmann Small |
Ab Bond and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Federated Kaufmann
The main advantage of trading using opposite Ab Bond and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
| Federated Kaufmann vs. Federated Global Allocation | Federated Kaufmann vs. Federated Total Return | Federated Kaufmann vs. Federated Max Cap Index | Federated Kaufmann vs. Federated U S |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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