Correlation Between Federated Equity and Columbia Disciplined
Can any of the company-specific risk be diversified away by investing in both Federated Equity and Columbia Disciplined 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 Equity and Columbia Disciplined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Equity Income and Columbia Disciplined E, you can compare the effects of market volatilities on Federated Equity and Columbia Disciplined 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 Equity with a short position of Columbia Disciplined. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Equity and Columbia Disciplined.
Diversification Opportunities for Federated Equity and Columbia Disciplined
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Columbia is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Federated Equity Income and Columbia Disciplined E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Disciplined and Federated 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 Federated Equity Income are associated (or correlated) with Columbia Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Disciplined has no effect on the direction of Federated Equity i.e., Federated Equity and Columbia Disciplined go up and down completely randomly.
Pair Corralation between Federated Equity and Columbia Disciplined
Assuming the 90 days horizon Federated Equity Income is expected to generate 1.11 times more return on investment than Columbia Disciplined. However, Federated Equity is 1.11 times more volatile than Columbia Disciplined E. It trades about 0.2 of its potential returns per unit of risk. Columbia Disciplined E is currently generating about 0.19 per unit of risk. If you would invest 2,552 in Federated Equity Income on August 26, 2024 and sell it today you would earn a total of 97.00 from holding Federated Equity Income or generate 3.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Equity Income vs. Columbia Disciplined E
Performance |
| Timeline |
| Federated Equity Income |
| Columbia Disciplined |
Federated Equity and Columbia Disciplined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Equity and Columbia Disciplined
The main advantage of trading using opposite Federated Equity and Columbia Disciplined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Equity position performs unexpectedly, Columbia Disciplined 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 Columbia Disciplined will offset losses from the drop in Columbia Disciplined's long position.| Federated Equity vs. Federated Emerging Market | Federated Equity vs. Federated Mdt All | Federated Equity vs. Federated Global Allocation | Federated Equity vs. Federated Hermes Emerging |
| Columbia Disciplined vs. Touchstone International Equity | Columbia Disciplined vs. Artisan Select Equity | Columbia Disciplined vs. Federated Equity Income | Columbia Disciplined vs. The Hartford Equity |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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