Correlation Between Federated Porate and Ab New
Can any of the company-specific risk be diversified away by investing in both Federated Porate and Ab New 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 Federated Porate and Ab New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Porate Bond and Ab New York, you can compare the effects of market volatilities on Federated Porate and Ab New 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 Federated Porate with a short position of Ab New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Porate and Ab New.
Diversification Opportunities for Federated Porate and Ab New
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and ALNVX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Federated Porate Bond and Ab New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab New York and Federated Porate 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 Federated Porate Bond are associated (or correlated) with Ab New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab New York has no effect on the direction of Federated Porate i.e., Federated Porate and Ab New go up and down completely randomly.
Pair Corralation between Federated Porate and Ab New
Assuming the 90 days horizon Federated Porate Bond is expected to generate 1.59 times more return on investment than Ab New. However, Federated Porate is 1.59 times more volatile than Ab New York. It trades about 0.12 of its potential returns per unit of risk. Ab New York is currently generating about 0.06 per unit of risk. If you would invest 991.00 in Federated Porate Bond on October 24, 2024 and sell it today you would earn a total of 7.00 from holding Federated Porate Bond or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Porate Bond vs. Ab New York
Performance |
| Timeline |
| Federated Porate Bond |
| Ab New York |
Federated Porate and Ab New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Porate and Ab New
The main advantage of trading using opposite Federated Porate and Ab New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Porate position performs unexpectedly, Ab New 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 Ab New will offset losses from the drop in Ab New's long position.| Federated Porate vs. Federated High Yield | Federated Porate vs. Pace High Yield | Federated Porate vs. Lord Abbett Short | Federated Porate vs. T Rowe Price |
| Ab New vs. Vy Goldman Sachs | Ab New vs. International Investors Gold | Ab New vs. First Eagle Gold | Ab New vs. Gold Portfolio Fidelity |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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