Correlation Between Federated Global and Ab E
Can any of the company-specific risk be diversified away by investing in both Federated Global and Ab E 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 Global and Ab E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Ab E Opportunities, you can compare the effects of market volatilities on Federated Global and Ab E 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 Global with a short position of Ab E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Ab E.
Diversification Opportunities for Federated Global and Ab E
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and ADGAX is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Ab E Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab E Opportunities and Federated Global 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 Global Allocation are associated (or correlated) with Ab E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab E Opportunities has no effect on the direction of Federated Global i.e., Federated Global and Ab E go up and down completely randomly.
Pair Corralation between Federated Global and Ab E
Assuming the 90 days horizon Federated Global is expected to generate 1.27 times less return on investment than Ab E. But when comparing it to its historical volatility, Federated Global Allocation is 1.69 times less risky than Ab E. It trades about 0.25 of its potential returns per unit of risk. Ab E Opportunities is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,310 in Ab E Opportunities on October 30, 2024 and sell it today you would earn a total of 70.00 from holding Ab E Opportunities or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Ab E Opportunities
Performance |
| Timeline |
| Federated Global All |
| Ab E Opportunities |
Federated Global and Ab E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Ab E
The main advantage of trading using opposite Federated Global and Ab E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Ab E 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 Ab E will offset losses from the drop in Ab E's long position.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Ab E vs. Ab Global Bond | Ab E vs. Rbc Global Equity | Ab E vs. Barings Global Floating | Ab E vs. Rbc Global Opportunities |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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