Correlation Between Federated Global and Core Fixed
Can any of the company-specific risk be diversified away by investing in both Federated Global and Core Fixed 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 Core Fixed 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 Core Fixed Income, you can compare the effects of market volatilities on Federated Global and Core Fixed 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 Core Fixed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Core Fixed.
Diversification Opportunities for Federated Global and Core Fixed
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Core is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Core Fixed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Fixed Income 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 Core Fixed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Fixed Income has no effect on the direction of Federated Global i.e., Federated Global and Core Fixed go up and down completely randomly.
Pair Corralation between Federated Global and Core Fixed
Assuming the 90 days horizon Federated Global Allocation is expected to generate 1.26 times more return on investment than Core Fixed. However, Federated Global is 1.26 times more volatile than Core Fixed Income. It trades about 0.06 of its potential returns per unit of risk. Core Fixed Income is currently generating about 0.02 per unit of risk. If you would invest 1,698 in Federated Global Allocation on October 26, 2024 and sell it today you would earn a total of 294.00 from holding Federated Global Allocation or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Federated Global Allocation vs. Core Fixed Income
Performance |
| Timeline |
| Federated Global All |
| Core Fixed Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Federated Global and Core Fixed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Core Fixed
The main advantage of trading using opposite Federated Global and Core Fixed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Core Fixed 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 Core Fixed will offset losses from the drop in Core Fixed'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 |
| Core Fixed vs. Smallcap Fund Fka | Core Fixed vs. Needham Small Cap | Core Fixed vs. Goldman Sachs Smallmid | Core Fixed vs. Nuveen Small Cap |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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