Correlation Between Federated Short and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Federated Short and Federated Mdt 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 Short and Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Short Intermediate Duration and Federated Mdt All, you can compare the effects of market volatilities on Federated Short and Federated Mdt 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 Short with a short position of Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short and Federated Mdt.
Diversification Opportunities for Federated Short and Federated Mdt
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Federated is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Intermediate D and Federated Mdt All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt All and Federated Short 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 Short Intermediate Duration are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt All has no effect on the direction of Federated Short i.e., Federated Short and Federated Mdt go up and down completely randomly.
Pair Corralation between Federated Short and Federated Mdt
Assuming the 90 days horizon Federated Short is expected to generate 17.51 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, Federated Short Intermediate Duration is 5.93 times less risky than Federated Mdt. It trades about 0.06 of its potential returns per unit of risk. Federated Mdt All is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,774 in Federated Mdt All on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Federated Mdt All or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Federated Short Intermediate D vs. Federated Mdt All
Performance |
| Timeline |
| Federated Short Inte |
| Federated Mdt All |
Federated Short and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Short and Federated Mdt
The main advantage of trading using opposite Federated Short and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short position performs unexpectedly, Federated Mdt 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 Mdt will offset losses from the drop in Federated Mdt's long position.| Federated Short vs. Federated Intermediate Municipal | Federated Short vs. Federated Ultrashort Bond | Federated Short vs. Federated Gov Sec | Federated Short vs. Federated Government Income |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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