Correlation Between Fa 529 and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Fa 529 and Federated Strategic 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 Fa 529 and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fa 529 Aggressive and Federated Strategic Income, you can compare the effects of market volatilities on Fa 529 and Federated Strategic 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 Fa 529 with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fa 529 and Federated Strategic.
Diversification Opportunities for Fa 529 and Federated Strategic
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FFCGX and Federated is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fa 529 Aggressive and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Fa 529 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 Fa 529 Aggressive are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Fa 529 i.e., Fa 529 and Federated Strategic go up and down completely randomly.
Pair Corralation between Fa 529 and Federated Strategic
Assuming the 90 days horizon Fa 529 Aggressive is expected to generate 2.31 times more return on investment than Federated Strategic. However, Fa 529 is 2.31 times more volatile than Federated Strategic Income. It trades about 0.1 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.09 per unit of risk. If you would invest 2,846 in Fa 529 Aggressive on September 13, 2024 and sell it today you would earn a total of 1,230 from holding Fa 529 Aggressive or generate 43.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fa 529 Aggressive vs. Federated Strategic Income
Performance |
| Timeline |
| Fa 529 Aggressive |
| Federated Strategic |
Fa 529 and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fa 529 and Federated Strategic
The main advantage of trading using opposite Fa 529 and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fa 529 position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Fa 529 vs. Kinetics Market Opportunities | Fa 529 vs. Barings Emerging Markets | Fa 529 vs. Locorr Market Trend | Fa 529 vs. Siit Emerging Markets |
| Federated Strategic vs. Iaadx | Federated Strategic vs. Ab Value Fund | Federated Strategic vs. Fa 529 Aggressive | Federated Strategic vs. Scharf Global Opportunity |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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