Correlation Between Federated Bond and Champlain Small
Can any of the company-specific risk be diversified away by investing in both Federated Bond and Champlain Small 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 Bond and Champlain Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Bond Fund and Champlain Small, you can compare the effects of market volatilities on Federated Bond and Champlain Small 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 Bond with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Bond and Champlain Small.
Diversification Opportunities for Federated Bond and Champlain Small
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Champlain is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Federated Bond Fund and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small and Federated Bond 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 Bond Fund are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Federated Bond i.e., Federated Bond and Champlain Small go up and down completely randomly.
Pair Corralation between Federated Bond and Champlain Small
Assuming the 90 days horizon Federated Bond is expected to generate 10.08 times less return on investment than Champlain Small. But when comparing it to its historical volatility, Federated Bond Fund is 5.32 times less risky than Champlain Small. It trades about 0.16 of its potential returns per unit of risk. Champlain Small is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,324 in Champlain Small on September 4, 2024 and sell it today you would earn a total of 231.00 from holding Champlain Small or generate 9.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Bond Fund vs. Champlain Small
Performance |
| Timeline |
| Federated Bond |
| Champlain Small |
Federated Bond and Champlain Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Bond and Champlain Small
The main advantage of trading using opposite Federated Bond and Champlain Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Bond position performs unexpectedly, Champlain Small 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 Champlain Small will offset losses from the drop in Champlain Small's long position.| Federated Bond vs. Goehring Rozencwajg Resources | Federated Bond vs. Icon Natural Resources | Federated Bond vs. Energy Basic Materials | Federated Bond vs. Franklin Natural Resources |
| Champlain Small vs. The Hartford Midcap | Champlain Small vs. Mfs Emerging Markets | Champlain Small vs. Wells Fargo Special | Champlain Small vs. Washington Mutual Investors |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |