Correlation Between Federated Mdt and Multi Manager
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Multi Manager 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 Mdt and Multi Manager into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mdt Large and Multi Manager Directional Alternative, you can compare the effects of market volatilities on Federated Mdt and Multi Manager 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 Mdt with a short position of Multi Manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Multi Manager.
Diversification Opportunities for Federated Mdt and Multi Manager
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and MULTI is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Multi Manager Directional Alte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Manager Direct and Federated Mdt 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 Mdt Large are associated (or correlated) with Multi Manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Manager Direct has no effect on the direction of Federated Mdt i.e., Federated Mdt and Multi Manager go up and down completely randomly.
Pair Corralation between Federated Mdt and Multi Manager
Assuming the 90 days horizon Federated Mdt Large is expected to generate 1.46 times more return on investment than Multi Manager. However, Federated Mdt is 1.46 times more volatile than Multi Manager Directional Alternative. It trades about 0.21 of its potential returns per unit of risk. Multi Manager Directional Alternative is currently generating about 0.21 per unit of risk. If you would invest 2,507 in Federated Mdt Large on August 25, 2024 and sell it today you would earn a total of 1,223 from holding Federated Mdt Large or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mdt Large vs. Multi Manager Directional Alte
Performance |
| Timeline |
| Federated Mdt Large |
| Multi Manager Direct |
Federated Mdt and Multi Manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Multi Manager
The main advantage of trading using opposite Federated Mdt and Multi Manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Multi Manager 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 Multi Manager will offset losses from the drop in Multi Manager's long position.| Federated Mdt vs. Federated Mdt Large | Federated Mdt vs. Federated Kaufmann Large | Federated Mdt vs. Federated Total Return | Federated Mdt vs. Nationwide Ziegler Nyse |
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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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