Correlation Between Federated Kaufmann and Prudential Total
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Prudential 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 Prudential 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 Prudential Total Return, you can compare the effects of market volatilities on Federated Kaufmann and Prudential 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 Prudential Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Prudential Total.
Diversification Opportunities for Federated Kaufmann and Prudential Total
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Prudential is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Small and Prudential Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential 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 Prudential Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Total Return has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Prudential Total go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Prudential Total
Assuming the 90 days horizon Federated Kaufmann Small is expected to generate 3.37 times more return on investment than Prudential Total. However, Federated Kaufmann is 3.37 times more volatile than Prudential Total Return. It trades about 0.2 of its potential returns per unit of risk. Prudential Total Return is currently generating about -0.04 per unit of risk. If you would invest 4,997 in Federated Kaufmann Small on September 2, 2024 and sell it today you would earn a total of 627.00 from holding Federated Kaufmann Small or generate 12.55% 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. Prudential Total Return
Performance |
| Timeline |
| Federated Kaufmann Small |
| Prudential Total Return |
Federated Kaufmann and Prudential Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Prudential Total
The main advantage of trading using opposite Federated Kaufmann and Prudential Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Prudential 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 Prudential Total will offset losses from the drop in Prudential 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 |
| Prudential Total vs. Prudential High Yield | Prudential Total vs. Prudential Short Term Porate | Prudential Total vs. Pimco Incme Fund | Prudential Total vs. Pimco Income Fund |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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