Correlation Between Ab Select and Federated Equity
Can any of the company-specific risk be diversified away by investing in both Ab Select and Federated Equity 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 Select and Federated Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Federated Equity Income, you can compare the effects of market volatilities on Ab Select and Federated Equity 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 Select with a short position of Federated Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Federated Equity.
Diversification Opportunities for Ab Select and Federated Equity
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AUUIX and FEDERATED is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Federated Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Equity Income and Ab Select 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 Select Equity are associated (or correlated) with Federated Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Equity Income has no effect on the direction of Ab Select i.e., Ab Select and Federated Equity go up and down completely randomly.
Pair Corralation between Ab Select and Federated Equity
Assuming the 90 days horizon Ab Select is expected to generate 1.26 times less return on investment than Federated Equity. But when comparing it to its historical volatility, Ab Select Equity is 1.07 times less risky than Federated Equity. It trades about 0.17 of its potential returns per unit of risk. Federated Equity Income is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,566 in Federated Equity Income on August 28, 2024 and sell it today you would earn a total of 97.00 from holding Federated Equity Income or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Federated Equity Income
Performance |
| Timeline |
| Ab Select Equity |
| Federated Equity Income |
Ab Select and Federated Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Federated Equity
The main advantage of trading using opposite Ab Select and Federated Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Federated Equity 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 Equity will offset losses from the drop in Federated Equity's long position.| Ab Select vs. Queens Road Small | Ab Select vs. Applied Finance Explorer | Ab Select vs. Small Cap Value Series | Ab Select vs. Victory Rs Partners |
| Federated Equity vs. Federated Emerging Market | Federated Equity vs. Federated Mdt All | Federated Equity vs. Federated Global Allocation | Federated Equity vs. Federated Hermes Emerging |
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.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |