Correlation Between Ab Value and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Ab Value and Federated Strategic 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 Value and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Value Fund and Federated Strategic Income, you can compare the effects of market volatilities on Ab Value and Federated Strategic 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 Value with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Value and Federated Strategic.
Diversification Opportunities for Ab Value and Federated Strategic
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABVCX and Federated is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ab Value Fund and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Ab Value 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 Value Fund are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Ab Value i.e., Ab Value and Federated Strategic go up and down completely randomly.
Pair Corralation between Ab Value and Federated Strategic
Assuming the 90 days horizon Ab Value Fund is expected to under-perform the Federated Strategic. In addition to that, Ab Value is 2.76 times more volatile than Federated Strategic Income. It trades about -0.03 of its total potential returns per unit of risk. Federated Strategic Income is currently generating about 0.23 per unit of volatility. If you would invest 827.00 in Federated Strategic Income on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Federated Strategic Income or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Value Fund vs. Federated Strategic Income
Performance |
| Timeline |
| Ab Value Fund |
| Federated Strategic |
Ab Value and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Value and Federated Strategic
The main advantage of trading using opposite Ab Value and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Value position performs unexpectedly, Federated Strategic 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 Strategic will offset losses from the drop in Federated Strategic's long position.| Ab Value vs. Putnam Convertible Incm Gwth | Ab Value vs. Fidelity Sai Convertible | Ab Value vs. Calamos Dynamic Convertible | Ab Value vs. Advent Claymore Convertible |
| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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