Correlation Between Federated Global and Sextant Core
Can any of the company-specific risk be diversified away by investing in both Federated Global and Sextant Core 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 Sextant Core 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 Sextant E Fund, you can compare the effects of market volatilities on Federated Global and Sextant Core 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 Sextant Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Sextant Core.
Diversification Opportunities for Federated Global and Sextant Core
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Sextant is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Sextant E Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant E Fund 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 Sextant Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant E Fund has no effect on the direction of Federated Global i.e., Federated Global and Sextant Core go up and down completely randomly.
Pair Corralation between Federated Global and Sextant Core
Assuming the 90 days horizon Federated Global Allocation is expected to under-perform the Sextant Core. In addition to that, Federated Global is 1.04 times more volatile than Sextant E Fund. It trades about -0.25 of its total potential returns per unit of risk. Sextant E Fund is currently generating about -0.2 per unit of volatility. If you would invest 1,712 in Sextant E Fund on October 11, 2024 and sell it today you would lose (43.00) from holding Sextant E Fund or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Sextant E Fund
Performance |
| Timeline |
| Federated Global All |
| Sextant E Fund |
Federated Global and Sextant Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Sextant Core
The main advantage of trading using opposite Federated Global and Sextant Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Sextant Core 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 Sextant Core will offset losses from the drop in Sextant Core'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 |
| Sextant Core vs. Alliancebernstein Global Highome | Sextant Core vs. Qs Global Equity | Sextant Core vs. Federated Global Allocation | Sextant Core vs. Scharf Global Opportunity |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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