Correlation Between Federated Floating and Federated
Can any of the company-specific risk be diversified away by investing in both Federated Floating 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 Floating and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Floating Rate and Federated U S, you can compare the effects of market volatilities on Federated Floating 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 Floating with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Floating and Federated.
Diversification Opportunities for Federated Floating and Federated
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Federated is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Federated Floating Rate 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 Floating 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 Floating Rate 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 Floating i.e., Federated Floating and Federated go up and down completely randomly.
Pair Corralation between Federated Floating and Federated
Assuming the 90 days horizon Federated Floating Rate is expected to generate 0.33 times more return on investment than Federated. However, Federated Floating Rate is 3.02 times less risky than Federated. It trades about 0.32 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 865.00 in Federated Floating Rate on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Federated Floating Rate or generate 0.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Federated Floating Rate vs. Federated U S
Performance |
| Timeline |
| Federated Floating Rate |
| Federated U S |
Federated Floating and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Floating and Federated
The main advantage of trading using opposite Federated Floating and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Floating 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 Floating vs. Vanguard Windsor Fund | Federated Floating vs. Avantis Large Cap | Federated Floating vs. Fundamental Large Cap | Federated Floating vs. Transamerica Large Cap |
| Federated vs. John Hancock Money | Federated vs. Wt Mutual Fund | Federated vs. Schwab Treasury Money | Federated vs. Janus Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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