Correlation Between Federated High and Bright Rock
Can any of the company-specific risk be diversified away by investing in both Federated High and Bright Rock 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 Bright Rock 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 Bright Rock Mid, you can compare the effects of market volatilities on Federated High and Bright Rock 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 Bright Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Bright Rock.
Diversification Opportunities for Federated High and Bright Rock
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federated and Bright is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Bright Rock Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Rock Mid 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 Bright Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Rock Mid has no effect on the direction of Federated High i.e., Federated High and Bright Rock go up and down completely randomly.
Pair Corralation between Federated High and Bright Rock
Assuming the 90 days horizon Federated High Yield is expected to generate 0.25 times more return on investment than Bright Rock. However, Federated High Yield is 4.05 times less risky than Bright Rock. It trades about 0.18 of its potential returns per unit of risk. Bright Rock Mid is currently generating about 0.03 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Bright Rock Mid
Performance |
| Timeline |
| Federated High Yield |
| Bright Rock Mid |
Federated High and Bright Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Bright Rock
The main advantage of trading using opposite Federated High and Bright Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Bright Rock 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 Bright Rock will offset losses from the drop in Bright Rock'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 |
| Bright Rock vs. Gabelli Gold Fund | Bright Rock vs. Gold Portfolio Fidelity | Bright Rock vs. Sprott Gold Equity | Bright Rock vs. Gold And Precious |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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