Correlation Between Federated Adjustable and 87612EBQ8
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By analyzing existing cross correlation between Federated Adjustable Rate and TGT 44 15 JAN 33, you can compare the effects of market volatilities on Federated Adjustable and 87612EBQ8 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 Adjustable with a short position of 87612EBQ8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Adjustable and 87612EBQ8.
Diversification Opportunities for Federated Adjustable and 87612EBQ8
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and 87612EBQ8 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Federated Adjustable Rate and TGT 44 15 JAN 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGT 44 15 and Federated Adjustable 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 Adjustable Rate are associated (or correlated) with 87612EBQ8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGT 44 15 has no effect on the direction of Federated Adjustable i.e., Federated Adjustable and 87612EBQ8 go up and down completely randomly.
Pair Corralation between Federated Adjustable and 87612EBQ8
Assuming the 90 days horizon Federated Adjustable Rate is not expected to generate positive returns. However, Federated Adjustable Rate is 6.81 times less risky than 87612EBQ8. It waists most of its returns potential to compensate for thr risk taken. 87612EBQ8 is generating about 0.12 per unit of risk. If you would invest 9,590 in TGT 44 15 JAN 33 on November 2, 2024 and sell it today you would earn a total of 110.00 from holding TGT 44 15 JAN 33 or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Federated Adjustable Rate vs. TGT 44 15 JAN 33
Performance |
| Timeline |
| Federated Adjustable Rate |
| TGT 44 15 |
Federated Adjustable and 87612EBQ8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Adjustable and 87612EBQ8
The main advantage of trading using opposite Federated Adjustable and 87612EBQ8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Adjustable position performs unexpectedly, 87612EBQ8 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 87612EBQ8 will offset losses from the drop in 87612EBQ8's long position.The idea behind Federated Adjustable Rate and TGT 44 15 JAN 33 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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