Correlation Between Federated and Federated Global
Can any of the company-specific risk be diversified away by investing in both Federated and Federated Global 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 and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated U S and Federated Global Allocation, you can compare the effects of market volatilities on Federated and Federated Global 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 with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated and Federated Global.
Diversification Opportunities for Federated and Federated Global
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Federated is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Federated U S and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Federated 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 U S are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Federated i.e., Federated and Federated Global go up and down completely randomly.
Pair Corralation between Federated and Federated Global
Assuming the 90 days horizon Federated is expected to generate 5.27 times less return on investment than Federated Global. But when comparing it to its historical volatility, Federated U S is 1.74 times less risky than Federated Global. It trades about 0.02 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,712 in Federated Global Allocation on September 3, 2024 and sell it today you would earn a total of 355.00 from holding Federated Global Allocation or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated U S vs. Federated Global Allocation
Performance |
| Timeline |
| Federated U S |
| Federated Global All |
Federated and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated and Federated Global
The main advantage of trading using opposite Federated and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated position performs unexpectedly, Federated Global 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 Federated Global will offset losses from the drop in Federated Global's long position.| Federated vs. Pgim Conservative Retirement | Federated vs. Aqr Diversified Arbitrage | Federated vs. Calvert Conservative Allocation | Federated vs. Delaware Limited Term Diversified |
| Federated Global vs. Federated Total Return | Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Small | Federated Global vs. Federated U S |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |