Correlation Between Federated Mortgage and Multi-manager High
Can any of the company-specific risk be diversified away by investing in both Federated Mortgage and Multi-manager High 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 Mortgage and Multi-manager High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mortgage Fund and Multi Manager High Yield, you can compare the effects of market volatilities on Federated Mortgage and Multi-manager High 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 Mortgage with a short position of Multi-manager High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mortgage and Multi-manager High.
Diversification Opportunities for Federated Mortgage and Multi-manager High
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Multi-manager is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mortgage Fund and Multi Manager High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager High and Federated Mortgage 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 Mortgage Fund are associated (or correlated) with Multi-manager High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager High has no effect on the direction of Federated Mortgage i.e., Federated Mortgage and Multi-manager High go up and down completely randomly.
Pair Corralation between Federated Mortgage and Multi-manager High
Assuming the 90 days horizon Federated Mortgage Fund is expected to under-perform the Multi-manager High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Mortgage Fund is 1.39 times less risky than Multi-manager High. The mutual fund trades about -0.44 of its potential returns per unit of risk. The Multi Manager High Yield is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 854.00 in Multi Manager High Yield on October 9, 2024 and sell it today you would lose (13.00) from holding Multi Manager High Yield or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mortgage Fund vs. Multi Manager High Yield
Performance |
| Timeline |
| Federated Mortgage |
| Multi Manager High |
Federated Mortgage and Multi-manager High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mortgage and Multi-manager High
The main advantage of trading using opposite Federated Mortgage and Multi-manager High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mortgage position performs unexpectedly, Multi-manager High 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 Multi-manager High will offset losses from the drop in Multi-manager High's long position.| Federated Mortgage vs. Ab Global Bond | Federated Mortgage vs. Multisector Bond Sma | Federated Mortgage vs. Ab Impact Municipal | Federated Mortgage vs. Bbh Intermediate Municipal |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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