Correlation Between Chestnut Street and Federated Global
Can any of the company-specific risk be diversified away by investing in both Chestnut Street and Federated Global 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 Chestnut Street and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chestnut Street Exchange and Federated Global Allocation, you can compare the effects of market volatilities on Chestnut Street and Federated Global 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 Chestnut Street with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chestnut Street and Federated Global.
Diversification Opportunities for Chestnut Street and Federated Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chestnut and Federated is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chestnut Street Exchange and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Chestnut Street 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 Chestnut Street Exchange are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Chestnut Street i.e., Chestnut Street and Federated Global go up and down completely randomly.
Pair Corralation between Chestnut Street and Federated Global
Assuming the 90 days horizon Chestnut Street is expected to generate 1.31 times less return on investment than Federated Global. In addition to that, Chestnut Street is 1.13 times more volatile than Federated Global Allocation. It trades about 0.11 of its total potential returns per unit of risk. Federated Global Allocation is currently generating about 0.16 per unit of volatility. If you would invest 2,063 in Federated Global Allocation on September 14, 2024 and sell it today you would earn a total of 25.00 from holding Federated Global Allocation or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chestnut Street Exchange vs. Federated Global Allocation
Performance |
| Timeline |
| Chestnut Street Exchange |
| Federated Global All |
Chestnut Street and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chestnut Street and Federated Global
The main advantage of trading using opposite Chestnut Street and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chestnut Street position performs unexpectedly, Federated Global 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 Global will offset losses from the drop in Federated Global's long position.| Chestnut Street vs. Janus Global Technology | Chestnut Street vs. Invesco Technology Fund | Chestnut Street vs. Mfs Technology Fund | Chestnut Street vs. Science Technology Fund |
| Federated Global vs. Chestnut Street Exchange | Federated Global vs. Aig Government Money | Federated Global vs. Blackrock Exchange Portfolio | Federated Global vs. Hewitt Money Market |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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