Correlation Between Federated Equity and Salient International
Can any of the company-specific risk be diversified away by investing in both Federated Equity and Salient International 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 Salient International 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 Salient International Real, you can compare the effects of market volatilities on Federated Equity and Salient International 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 Salient International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Equity and Salient International.
Diversification Opportunities for Federated Equity and Salient International
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between FEDERATED and Salient is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Federated Equity Income and Salient International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient International 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 Salient International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient International has no effect on the direction of Federated Equity i.e., Federated Equity and Salient International go up and down completely randomly.
Pair Corralation between Federated Equity and Salient International
Assuming the 90 days horizon Federated Equity Income is expected to generate 0.85 times more return on investment than Salient International. However, Federated Equity Income is 1.18 times less risky than Salient International. It trades about 0.05 of its potential returns per unit of risk. Salient International Real is currently generating about 0.03 per unit of risk. If you would invest 2,197 in Federated Equity Income on August 26, 2024 and sell it today you would earn a total of 452.00 from holding Federated Equity Income or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Equity Income vs. Salient International Real
Performance |
| Timeline |
| Federated Equity Income |
| Salient International |
Federated Equity and Salient International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Equity and Salient International
The main advantage of trading using opposite Federated Equity and Salient International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Equity position performs unexpectedly, Salient International 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 Salient International will offset losses from the drop in Salient International'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 |
| Salient International vs. Us Vector Equity | Salient International vs. Federated Equity Income | Salient International vs. Vanguard Telecommunication Services | Salient International vs. Rbc Global 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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