Correlation Between Federated Floating and Federated Total
Can any of the company-specific risk be diversified away by investing in both Federated Floating and Federated Total 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 Total 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 Total Return, you can compare the effects of market volatilities on Federated Floating and Federated Total 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 Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Floating and Federated Total.
Diversification Opportunities for Federated Floating and Federated Total
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Federated is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Federated Floating Rate and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return 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 Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Federated Floating i.e., Federated Floating and Federated Total go up and down completely randomly.
Pair Corralation between Federated Floating and Federated Total
Assuming the 90 days horizon Federated Floating Rate is expected to generate 0.37 times more return on investment than Federated Total. However, Federated Floating Rate is 2.68 times less risky than Federated Total. It trades about 0.2 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.02 per unit of risk. If you would invest 746.00 in Federated Floating Rate on August 29, 2024 and sell it today you would earn a total of 123.00 from holding Federated Floating Rate or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Federated Floating Rate vs. Federated Total Return
Performance |
| Timeline |
| Federated Floating Rate |
| Federated Total Return |
Federated Floating and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Floating and Federated Total
The main advantage of trading using opposite Federated Floating and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Floating position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Federated Floating vs. Icon Natural Resources | Federated Floating vs. Alpsalerian Energy Infrastructure | Federated Floating vs. Gmo Resources | Federated Floating vs. Dreyfus Natural Resources |
| Federated Total vs. Angel Oak Ultrashort | Federated Total vs. Siit Ultra Short | Federated Total vs. Rbc Short Duration | Federated Total vs. Federated Short Intermediate Duration |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |