Correlation Between Federated Mdt and Payden Strategic
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Payden Strategic 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 Payden Strategic 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 Payden Strategic Income, you can compare the effects of market volatilities on Federated Mdt and Payden Strategic 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 Payden Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Payden Strategic.
Diversification Opportunities for Federated Mdt and Payden Strategic
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Payden is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Payden Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Strategic Income 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 Payden Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Strategic Income has no effect on the direction of Federated Mdt i.e., Federated Mdt and Payden Strategic go up and down completely randomly.
Pair Corralation between Federated Mdt and Payden Strategic
Assuming the 90 days horizon Federated Mdt Large is expected to generate 4.0 times more return on investment than Payden Strategic. However, Federated Mdt is 4.0 times more volatile than Payden Strategic Income. It trades about 0.19 of its potential returns per unit of risk. Payden Strategic Income is currently generating about 0.17 per unit of risk. If you would invest 3,200 in Federated Mdt Large on September 1, 2024 and sell it today you would earn a total of 554.00 from holding Federated Mdt Large or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Federated Mdt Large vs. Payden Strategic Income
Performance |
| Timeline |
| Federated Mdt Large |
| Payden Strategic Income |
Federated Mdt and Payden Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Payden Strategic
The main advantage of trading using opposite Federated Mdt and Payden Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Payden Strategic 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 Payden Strategic will offset losses from the drop in Payden Strategic'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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