Correlation Between Federated and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Federated and Federated Kaufmann 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 and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Gov Sec and Federated Kaufmann Small, you can compare the effects of market volatilities on Federated and Federated Kaufmann 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 with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated and Federated Kaufmann.
Diversification Opportunities for Federated and Federated Kaufmann
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Federated is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Federated Gov Sec and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small and Federated 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 Gov Sec are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Federated i.e., Federated and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Federated and Federated Kaufmann
Assuming the 90 days horizon Federated is expected to generate 5.96 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Federated Gov Sec is 9.33 times less risky than Federated Kaufmann. It trades about 0.14 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,942 in Federated Kaufmann Small on September 1, 2024 and sell it today you would earn a total of 682.00 from holding Federated Kaufmann Small or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Gov Sec vs. Federated Kaufmann Small
Performance |
| Timeline |
| Federated Gov Sec |
| Federated Kaufmann Small |
Federated and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated and Federated Kaufmann
The main advantage of trading using opposite Federated and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Federated vs. Federated Emerging Market | Federated vs. Federated Mdt All | Federated vs. Federated Mdt Balanced | Federated vs. Federated Global Allocation |
| Federated Kaufmann vs. Federated Emerging Market | Federated Kaufmann vs. Federated Mdt All | Federated Kaufmann vs. Federated Mdt Balanced | Federated Kaufmann 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |