Correlation Between Federated Government and Sa International
Can any of the company-specific risk be diversified away by investing in both Federated Government and Sa 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 Government and Sa International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Government Ultrashort and Sa International Value, you can compare the effects of market volatilities on Federated Government and Sa 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 Government with a short position of Sa International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Sa International.
Diversification Opportunities for Federated Government and Sa International
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEDERATED and SAHMX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Ultrashor and Sa International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa International Value and Federated Government 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 Government Ultrashort are associated (or correlated) with Sa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa International Value has no effect on the direction of Federated Government i.e., Federated Government and Sa International go up and down completely randomly.
Pair Corralation between Federated Government and Sa International
Assuming the 90 days horizon Federated Government is expected to generate 11.02 times less return on investment than Sa International. But when comparing it to its historical volatility, Federated Government Ultrashort is 6.74 times less risky than Sa International. It trades about 0.22 of its potential returns per unit of risk. Sa International Value is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,267 in Sa International Value on October 25, 2024 and sell it today you would earn a total of 58.00 from holding Sa International Value or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Government Ultrashor vs. Sa International Value
Performance |
| Timeline |
| Federated Government |
| Sa International Value |
Federated Government and Sa International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Government and Sa International
The main advantage of trading using opposite Federated Government and Sa International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Government position performs unexpectedly, Sa 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 Sa International will offset losses from the drop in Sa International's long position.| Federated Government vs. Pimco Short Term Fund | Federated Government vs. Short Term Fund Institutional | Federated Government vs. Short Term Fund Administrative | Federated Government vs. Short Term Fund R |
| Sa International vs. Oakhurst Short Duration | Sa International vs. Federated Government Ultrashort | Sa International vs. Delaware Investments Ultrashort | Sa International vs. Virtus Multi Sector Short |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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