Correlation Between Federated Global and Partners Value
Can any of the company-specific risk be diversified away by investing in both Federated Global and Partners Value 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 Partners Value 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 Partners Value Fund, you can compare the effects of market volatilities on Federated Global and Partners Value 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 Partners Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Partners Value.
Diversification Opportunities for Federated Global and Partners Value
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Partners is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Partners Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Value 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 Partners Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Value has no effect on the direction of Federated Global i.e., Federated Global and Partners Value go up and down completely randomly.
Pair Corralation between Federated Global and Partners Value
Assuming the 90 days horizon Federated Global is expected to generate 1.54 times less return on investment than Partners Value. But when comparing it to its historical volatility, Federated Global Allocation is 1.95 times less risky than Partners Value. It trades about 0.31 of its potential returns per unit of risk. Partners Value Fund is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,616 in Partners Value Fund on September 3, 2024 and sell it today you would earn a total of 165.00 from holding Partners Value Fund or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Partners Value Fund
Performance |
| Timeline |
| Federated Global All |
| Partners Value |
Federated Global and Partners Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Partners Value
The main advantage of trading using opposite Federated Global and Partners Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Partners Value 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 Partners Value will offset losses from the drop in Partners Value'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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