Correlation Between Federated High and Ambrus Core
Can any of the company-specific risk be diversified away by investing in both Federated High and Ambrus Core 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 Ambrus Core 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 Ambrus Core Bond, you can compare the effects of market volatilities on Federated High and Ambrus Core 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 Ambrus Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Ambrus Core.
Diversification Opportunities for Federated High and Ambrus Core
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and Ambrus is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond 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 Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Federated High i.e., Federated High and Ambrus Core go up and down completely randomly.
Pair Corralation between Federated High and Ambrus Core
Assuming the 90 days horizon Federated High Yield is expected to generate 1.17 times more return on investment than Ambrus Core. However, Federated High is 1.17 times more volatile than Ambrus Core Bond. It trades about 0.3 of its potential returns per unit of risk. Ambrus Core Bond is currently generating about 0.14 per unit of risk. If you would invest 632.00 in Federated High Yield on October 23, 2024 and sell it today you would earn a total of 8.00 from holding Federated High Yield or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Ambrus Core Bond
Performance |
| Timeline |
| Federated High Yield |
| Ambrus Core Bond |
Federated High and Ambrus Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Ambrus Core
The main advantage of trading using opposite Federated High and Ambrus Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Ambrus Core 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 Ambrus Core will offset losses from the drop in Ambrus Core'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 |
| Ambrus Core vs. Morningstar Defensive Bond | Ambrus Core vs. Western Asset Municipal | Ambrus Core vs. Intermediate Term Bond Fund | Ambrus Core vs. Multisector Bond Sma |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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