Correlation Between Federated Max and Federated
Can any of the company-specific risk be diversified away by investing in both Federated Max and Federated 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 Max and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Max Cap Index and Federated U S, you can compare the effects of market volatilities on Federated Max and Federated 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 Max with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Max and Federated.
Diversification Opportunities for Federated Max and Federated
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Federated is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Federated Max Cap Index and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S and Federated Max 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 Max Cap Index are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Federated Max i.e., Federated Max and Federated go up and down completely randomly.
Pair Corralation between Federated Max and Federated
Assuming the 90 days horizon Federated Max Cap Index is expected to generate 3.33 times more return on investment than Federated. However, Federated Max is 3.33 times more volatile than Federated U S. It trades about 0.2 of its potential returns per unit of risk. Federated U S is currently generating about -0.15 per unit of risk. If you would invest 828.00 in Federated Max Cap Index on September 12, 2024 and sell it today you would earn a total of 69.00 from holding Federated Max Cap Index or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Federated Max Cap Index vs. Federated U S
Performance |
| Timeline |
| Federated Max Cap |
| Federated U S |
Federated Max and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Max and Federated
The main advantage of trading using opposite Federated Max and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Max position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Federated Max vs. Vanguard Total Stock | Federated Max vs. Vanguard 500 Index | Federated Max vs. Vanguard Total Stock | Federated Max vs. Vanguard Total Stock |
| Federated vs. Federated Government Income | Federated vs. Nationwide Fund Institutional | Federated vs. Federated Max Cap Index | Federated vs. The Brown Capital |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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