Correlation Between Barings Active and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Federated Kaufmann Small, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Federated Kaufmann.
Diversification Opportunities for Barings Active and Federated Kaufmann
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barings and Federated is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short 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 Barings Active 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 Barings Active Short 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 Barings Active i.e., Barings Active and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Barings Active and Federated Kaufmann
Assuming the 90 days horizon Barings Active is expected to generate 3.77 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Barings Active Short is 9.47 times less risky than Federated Kaufmann. It trades about 0.24 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,733 in Federated Kaufmann Small on September 5, 2024 and sell it today you would earn a total of 671.00 from holding Federated Kaufmann Small or generate 14.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Active Short vs. Federated Kaufmann Small
Performance |
| Timeline |
| Barings Active Short |
| Federated Kaufmann Small |
Barings Active and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Active and Federated Kaufmann
The main advantage of trading using opposite Barings Active and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.| Barings Active vs. American Funds Inflation | Barings Active vs. Goldman Sachs Managed | Barings Active vs. Guidepath Managed Futures | Barings Active vs. Ab Bond Inflation |
| Federated Kaufmann vs. Rbc Short Duration | Federated Kaufmann vs. Vanguard Institutional Short Term | Federated Kaufmann vs. Barings Active Short | Federated Kaufmann vs. Maryland Short Term Tax Free |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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