Correlation Between Federated High and Ab High
Can any of the company-specific risk be diversified away by investing in both Federated High and Ab 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 High and Ab High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Ab High Income, you can compare the effects of market volatilities on Federated High and Ab 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 High with a short position of Ab High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Ab High.
Diversification Opportunities for Federated High and Ab High
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and AGDIX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Ab High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab High Income 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 Yield are associated (or correlated) with Ab High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab High Income has no effect on the direction of Federated High i.e., Federated High and Ab High go up and down completely randomly.
Pair Corralation between Federated High and Ab High
Assuming the 90 days horizon Federated High Yield is expected to generate 1.2 times more return on investment than Ab High. However, Federated High is 1.2 times more volatile than Ab High Income. It trades about 0.19 of its potential returns per unit of risk. Ab High Income is currently generating about 0.12 per unit of risk. If you would invest 636.00 in Federated High Yield on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Federated High Yield or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Ab High Income
Performance |
| Timeline |
| Federated High Yield |
| Ab High Income |
Federated High and Ab High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Ab High
The main advantage of trading using opposite Federated High and Ab High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Ab 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 Ab High will offset losses from the drop in Ab High's long position.| Federated High vs. Janus High Yield Fund | Federated High vs. Northeast Investors Trust | Federated High vs. High Yield Fund Investor | Federated High vs. Ab Sustainable Thematic |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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