Correlation Between Federated Global and Federated Floating
Can any of the company-specific risk be diversified away by investing in both Federated Global and Federated Floating 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 Federated Floating 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 Federated Floating Rate, you can compare the effects of market volatilities on Federated Global and Federated Floating 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 Federated Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Federated Floating.
Diversification Opportunities for Federated Global and Federated Floating
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Federated is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Federated Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Floating Rate 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 Federated Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Floating Rate has no effect on the direction of Federated Global i.e., Federated Global and Federated Floating go up and down completely randomly.
Pair Corralation between Federated Global and Federated Floating
Assuming the 90 days horizon Federated Global is expected to generate 8.42 times less return on investment than Federated Floating. In addition to that, Federated Global is 3.32 times more volatile than Federated Floating Rate. It trades about 0.01 of its total potential returns per unit of risk. Federated Floating Rate is currently generating about 0.28 per unit of volatility. If you would invest 855.00 in Federated Floating Rate on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Federated Floating Rate or generate 1.64% 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. Federated Floating Rate
Performance |
| Timeline |
| Federated Global All |
| Federated Floating Rate |
Federated Global and Federated Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Federated Floating
The main advantage of trading using opposite Federated Global and Federated Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Federated Floating 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 Floating will offset losses from the drop in Federated Floating's long position.| Federated Global vs. Federated Emerging Market | Federated Global vs. Federated Mdt All | Federated Global vs. Federated Mdt Balanced | Federated Global vs. Federated Hermes Emerging |
| Federated Floating vs. Federated Emerging Market | Federated Floating vs. Federated Mdt All | Federated Floating vs. Federated Mdt Balanced | Federated Floating vs. Federated Global Allocation |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |