Correlation Between Federated High and SCOR PK
Can any of the company-specific risk be diversified away by investing in both Federated High and SCOR PK 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 High and SCOR PK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Income and SCOR PK, you can compare the effects of market volatilities on Federated High and SCOR PK 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 High with a short position of SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and SCOR PK.
Diversification Opportunities for Federated High and SCOR PK
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and SCOR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Income and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK and Federated High 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 High Income are associated (or correlated) with SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of Federated High i.e., Federated High and SCOR PK go up and down completely randomly.
Pair Corralation between Federated High and SCOR PK
Assuming the 90 days horizon Federated High Income is expected to generate 0.06 times more return on investment than SCOR PK. However, Federated High Income is 18.14 times less risky than SCOR PK. It trades about 0.18 of its potential returns per unit of risk. SCOR PK is currently generating about 0.01 per unit of risk. If you would invest 632.00 in Federated High Income on December 2, 2024 and sell it today you would earn a total of 51.00 from holding Federated High Income or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Federated High Income vs. SCOR PK
Performance |
| Timeline |
| Federated High Income |
| SCOR PK |
Federated High and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and SCOR PK
The main advantage of trading using opposite Federated High and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| Federated High vs. Aqr Risk Parity | Federated High vs. Pace High Yield | Federated High vs. Virtus High Yield | Federated High vs. Siit High Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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