Correlation Between Federated Kaufmann and Guggenheim Total
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Guggenheim Total 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 Kaufmann and Guggenheim Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Kaufmann Small and Guggenheim Total Return, you can compare the effects of market volatilities on Federated Kaufmann and Guggenheim Total 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 Kaufmann with a short position of Guggenheim Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Guggenheim Total.
Diversification Opportunities for Federated Kaufmann and Guggenheim Total
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Guggenheim is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Small and Guggenheim Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Total Return and Federated Kaufmann 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 Kaufmann Small are associated (or correlated) with Guggenheim Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Total Return has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Guggenheim Total go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Guggenheim Total
Assuming the 90 days horizon Federated Kaufmann Small is expected to generate 2.93 times more return on investment than Guggenheim Total. However, Federated Kaufmann is 2.93 times more volatile than Guggenheim Total Return. It trades about 0.06 of its potential returns per unit of risk. Guggenheim Total Return is currently generating about 0.05 per unit of risk. If you would invest 4,239 in Federated Kaufmann Small on September 2, 2024 and sell it today you would earn a total of 1,385 from holding Federated Kaufmann Small or generate 32.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Small vs. Guggenheim Total Return
Performance |
| Timeline |
| Federated Kaufmann Small |
| Guggenheim Total Return |
Federated Kaufmann and Guggenheim Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Guggenheim Total
The main advantage of trading using opposite Federated Kaufmann and Guggenheim Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Guggenheim Total 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 Guggenheim Total will offset losses from the drop in Guggenheim Total's long position.| Federated Kaufmann vs. Ab Small Cap | Federated Kaufmann vs. Jpmorgan Small Cap | Federated Kaufmann vs. Artisan Small Cap | Federated Kaufmann vs. Us Small Cap |
| Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Calvert Long Term Income | Guggenheim Total vs. Guggenheim Investment Grade |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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