Correlation Between Federated Mid-cap and Federated
Can any of the company-specific risk be diversified away by investing in both Federated Mid-cap 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 Mid-cap and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mid Cap Index and Federated U S, you can compare the effects of market volatilities on Federated Mid-cap 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 Mid-cap with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mid-cap and Federated.
Diversification Opportunities for Federated Mid-cap and Federated
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FEDERATED and Federated is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mid 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 Mid-cap 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 Mid 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 Mid-cap i.e., Federated Mid-cap and Federated go up and down completely randomly.
Pair Corralation between Federated Mid-cap and Federated
Assuming the 90 days horizon Federated Mid Cap Index is expected to generate 6.22 times more return on investment than Federated. However, Federated Mid-cap is 6.22 times more volatile than Federated U S. It trades about 0.31 of its potential returns per unit of risk. Federated U S is currently generating about 0.03 per unit of risk. If you would invest 1,754 in Federated Mid Cap Index on September 4, 2024 and sell it today you would earn a total of 138.00 from holding Federated Mid Cap Index or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mid Cap Index vs. Federated U S
Performance |
| Timeline |
| Federated Mid Cap |
| Federated U S |
Federated Mid-cap and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mid-cap and Federated
The main advantage of trading using opposite Federated Mid-cap and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mid-cap 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 Mid-cap vs. Federated Max Cap Index | Federated Mid-cap vs. Federated Mdt Large | Federated Mid-cap vs. Federated Total Return | Federated Mid-cap vs. Dreyfus Smallcap Stock |
| Federated vs. Federated Government Income | Federated vs. Nationwide Fund Institutional | Federated vs. Federated U S | Federated vs. Federated Max Cap Index |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |