Correlation Between Cutler Equity and Federated Equity
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and Federated Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Federated Equity Income, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of Federated Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Federated Equity.
Diversification Opportunities for Cutler Equity and Federated Equity
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cutler and Federated is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cutler 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 Cutler Equity 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 Cutler 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 Cutler Equity i.e., Cutler Equity and Federated Equity go up and down completely randomly.
Pair Corralation between Cutler Equity and Federated Equity
Assuming the 90 days horizon Cutler Equity is expected to generate 0.89 times more return on investment than Federated Equity. However, Cutler Equity is 1.13 times less risky than Federated Equity. It trades about 0.16 of its potential returns per unit of risk. Federated Equity Income is currently generating about 0.12 per unit of risk. If you would invest 2,591 in Cutler Equity on September 1, 2024 and sell it today you would earn a total of 348.00 from holding Cutler Equity or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cutler Equity vs. Federated Equity Income
Performance |
| Timeline |
| Cutler Equity |
| Federated Equity Income |
Cutler Equity and Federated Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Federated Equity
The main advantage of trading using opposite Cutler Equity and Federated Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Fidelity Sai Convertible | Cutler Equity vs. Virtus Convertible | Cutler Equity vs. Putnam Convertible Incm Gwth | Cutler Equity vs. Allianzgi Convertible Income |
| Federated Equity vs. Delaware Limited Term Diversified | Federated Equity vs. Lord Abbett Diversified | Federated Equity vs. Massmutual Premier Diversified | Federated Equity vs. Pimco Diversified Income |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |