Correlation Between Federated Equity and Ab Select
Can any of the company-specific risk be diversified away by investing in both Federated Equity and Ab Select 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 Ab Select 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 Ab Select Equity, you can compare the effects of market volatilities on Federated Equity and Ab Select 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 Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Equity and Ab Select.
Diversification Opportunities for Federated Equity and Ab Select
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and AUUIX is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Federated Equity Income and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity 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 Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Federated Equity i.e., Federated Equity and Ab Select go up and down completely randomly.
Pair Corralation between Federated Equity and Ab Select
Assuming the 90 days horizon Federated Equity Income is expected to generate 1.07 times more return on investment than Ab Select. However, Federated Equity is 1.07 times more volatile than Ab Select Equity. It trades about 0.21 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.17 per unit of risk. If you would invest 2,566 in Federated Equity Income on August 28, 2024 and sell it today you would earn a total of 97.00 from holding Federated Equity Income or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Equity Income vs. Ab Select Equity
Performance |
| Timeline |
| Federated Equity Income |
| Ab Select Equity |
Federated Equity and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Equity and Ab Select
The main advantage of trading using opposite Federated Equity and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Equity position performs unexpectedly, Ab Select 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 Select will offset losses from the drop in Ab Select'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 |
| Ab Select vs. Queens Road Small | Ab Select vs. Applied Finance Explorer | Ab Select vs. Small Cap Value Series | Ab Select vs. Victory Rs Partners |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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