Correlation Between Eic Value and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Eic Value and Federated Mdt 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 Eic Value and Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Federated Mdt Large, you can compare the effects of market volatilities on Eic Value and Federated Mdt 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 Eic Value with a short position of Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Federated Mdt.
Diversification Opportunities for Eic Value and Federated Mdt
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eic and Federated is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Federated Mdt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Large and Eic 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 Eic Value Fund are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Large has no effect on the direction of Eic Value i.e., Eic Value and Federated Mdt go up and down completely randomly.
Pair Corralation between Eic Value and Federated Mdt
Assuming the 90 days horizon Eic Value is expected to generate 1.67 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, Eic Value Fund is 1.05 times less risky than Federated Mdt. It trades about 0.12 of its potential returns per unit of risk. Federated Mdt Large is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,687 in Federated Mdt Large on August 24, 2024 and sell it today you would earn a total of 1,005 from holding Federated Mdt Large or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Eic Value Fund vs. Federated Mdt Large
Performance |
| Timeline |
| Eic Value Fund |
| Federated Mdt Large |
Eic Value and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Federated Mdt
The main advantage of trading using opposite Eic Value and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Federated Mdt 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 Mdt will offset losses from the drop in Federated Mdt's long position.| Eic Value vs. Federated Mdt Large | Eic Value vs. Nationwide Ziegler Nyse | Eic Value vs. HUMANA INC | Eic Value vs. Aquagold International |
| Federated Mdt vs. Federated Mdt Large | Federated Mdt vs. Nationwide Ziegler Nyse | Federated Mdt vs. Federated Equity Income | Federated Mdt vs. Federated Mdt Large |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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