Correlation Between Federated International and Federated Total
Can any of the company-specific risk be diversified away by investing in both Federated International and Federated Total 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 International and Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated International Leaders and Federated Total Return, you can compare the effects of market volatilities on Federated International and Federated Total 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 International with a short position of Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated International and Federated Total.
Diversification Opportunities for Federated International and Federated Total
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and FEDERATED is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated International Leader and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return and Federated International 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 International Leaders are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Federated International i.e., Federated International and Federated Total go up and down completely randomly.
Pair Corralation between Federated International and Federated Total
Assuming the 90 days horizon Federated International Leaders is expected to generate 2.16 times more return on investment than Federated Total. However, Federated International is 2.16 times more volatile than Federated Total Return. It trades about 0.03 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.04 per unit of risk. If you would invest 3,403 in Federated International Leaders on November 19, 2024 and sell it today you would earn a total of 469.00 from holding Federated International Leaders or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated International Leader vs. Federated Total Return
Performance |
| Timeline |
| Federated International |
| Federated Total Return |
Federated International and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated International and Federated Total
The main advantage of trading using opposite Federated International and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated International position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Federated International vs. Vy Clarion Global | Federated International vs. Nexpoint Real Estate | Federated International vs. American Century Real | Federated International vs. Real Estate Fund |
| Federated Total vs. Invesco Growth And | Federated Total vs. Mainstay Nerstone Growth | Federated Total vs. Perkins Mid Cap | Federated Total vs. Jpmorgan E Bond |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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