Correlation Between Federated and Federated Mid-cap
Can any of the company-specific risk be diversified away by investing in both Federated and Federated Mid-cap 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 Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated U S and Federated Mid Cap Index, you can compare the effects of market volatilities on Federated and Federated Mid-cap 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 Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated and Federated Mid-cap.
Diversification Opportunities for Federated and Federated Mid-cap
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Federated is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Federated U S and Federated Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mid Cap 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 U S are associated (or correlated) with Federated Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mid Cap has no effect on the direction of Federated i.e., Federated and Federated Mid-cap go up and down completely randomly.
Pair Corralation between Federated and Federated Mid-cap
Assuming the 90 days horizon Federated U S is expected to generate 0.1 times more return on investment than Federated Mid-cap. However, Federated U S is 9.88 times less risky than Federated Mid-cap. It trades about 0.29 of its potential returns per unit of risk. Federated Mid Cap Index is currently generating about -0.24 per unit of risk. If you would invest 959.00 in Federated U S on November 28, 2024 and sell it today you would earn a total of 5.00 from holding Federated U S or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated U S vs. Federated Mid Cap Index
Performance |
| Timeline |
| Federated U S |
| Federated Mid Cap |
Federated and Federated Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated and Federated Mid-cap
The main advantage of trading using opposite Federated and Federated Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated position performs unexpectedly, Federated Mid-cap 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 Mid-cap will offset losses from the drop in Federated Mid-cap's long position.| Federated vs. Intermediate Term Tax Free Bond | Federated vs. Aig Government Money | Federated vs. Inverse Government Long | Federated vs. Old Westbury Municipal |
| Federated Mid-cap vs. Dreyfus Smallcap Stock | Federated Mid-cap vs. Federated Mid Cap Index | Federated Mid-cap vs. Wells Fargo Growth | Federated Mid-cap vs. Dreyfus Midcap Index |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |