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
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Federated is 0.5. 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 Allocation is expected to generate 3.44 times more return on investment than Federated Floating. However, Federated Global is 3.44 times more volatile than Federated Floating Rate. It trades about 0.08 of its potential returns per unit of risk. Federated Floating Rate is currently generating about 0.2 per unit of risk. If you would invest 1,692 in Federated Global Allocation on September 1, 2024 and sell it today you would earn a total of 396.00 from holding Federated Global Allocation or generate 23.4% 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. International Investors Gold | Federated Global vs. Great West Goldman Sachs | Federated Global vs. Gold And Precious | Federated Global vs. Franklin Gold Precious |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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