Correlation Between Federated and Federated
Can any of the company-specific risk be diversified away by investing in both Federated and Federated 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 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 U S, you can compare the effects of market volatilities on Federated and Federated 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated and Federated.
Diversification Opportunities for Federated and Federated
Almost no diversification
The 3 months correlation between Federated and Federated is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Federated Gov Sec and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Federated i.e., Federated and Federated go up and down completely randomly.
Pair Corralation between Federated and Federated
Assuming the 90 days horizon Federated is expected to generate 1.09 times less return on investment than Federated. In addition to that, Federated is 1.03 times more volatile than Federated U S. It trades about 0.12 of its total potential returns per unit of risk. Federated U S is currently generating about 0.13 per unit of volatility. If you would invest 933.00 in Federated U S on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Federated U S or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Federated Gov Sec vs. Federated U S
Performance |
| Timeline |
| Federated Gov Sec |
| Federated U S |
Federated and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated and Federated
The main advantage of trading using opposite Federated and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Federated vs. Federated Emerging Market | Federated vs. Federated Mdt All | Federated vs. Federated Mdt Balanced | Federated vs. Federated Global Allocation |
| Federated vs. Federated Emerging Market | Federated vs. Federated Mdt All | Federated vs. Federated Mdt Balanced | Federated 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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