Correlation Between Federated Kaufmann and Federated Global
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann 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 Kaufmann 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 Kaufmann Small and Federated Global Allocation, you can compare the effects of market volatilities on Federated Kaufmann 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 Kaufmann with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Federated Global.
Diversification Opportunities for Federated Kaufmann and Federated Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Federated is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Small 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 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 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 Kaufmann i.e., Federated Kaufmann and Federated Global go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Federated Global
Assuming the 90 days horizon Federated Kaufmann Small is expected to generate 2.29 times more return on investment than Federated Global. However, Federated Kaufmann is 2.29 times more volatile than Federated Global Allocation. It trades about 0.09 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.1 per unit of risk. If you would invest 4,795 in Federated Kaufmann Small on September 1, 2024 and sell it today you would earn a total of 650.00 from holding Federated Kaufmann Small or generate 13.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Small vs. Federated Global Allocation
Performance |
| Timeline |
| Federated Kaufmann Small |
| Federated Global All |
Federated Kaufmann and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Federated Global
The main advantage of trading using opposite Federated Kaufmann and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann 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 Kaufmann vs. Federated Emerging Market | Federated Kaufmann vs. Federated Mdt All | Federated Kaufmann vs. Federated Mdt Balanced | Federated Kaufmann vs. Federated Global Allocation |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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