Correlation Between Federated Short-term and Barings Active
Can any of the company-specific risk be diversified away by investing in both Federated Short-term and Barings Active 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-term and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Short Term Income and Barings Active Short, you can compare the effects of market volatilities on Federated Short-term and Barings Active 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-term with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-term and Barings Active.
Diversification Opportunities for Federated Short-term and Barings Active
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and Barings is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Term Income and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short and Federated Short-term 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 Term Income are associated (or correlated) with Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Federated Short-term i.e., Federated Short-term and Barings Active go up and down completely randomly.
Pair Corralation between Federated Short-term and Barings Active
Assuming the 90 days horizon Federated Short-term is expected to generate 1.27 times less return on investment than Barings Active. In addition to that, Federated Short-term is 1.01 times more volatile than Barings Active Short. It trades about 0.18 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.23 per unit of volatility. If you would invest 855.00 in Barings Active Short on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Barings Active Short or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Short Term Income vs. Barings Active Short
Performance |
| Timeline |
| Federated Short Term |
| Barings Active Short |
Federated Short-term and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Short-term and Barings Active
The main advantage of trading using opposite Federated Short-term and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short-term position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Federated Short-term vs. American Century Etf | Federated Short-term vs. Lord Abbett Small | Federated Short-term vs. Victory Rs Partners | Federated Short-term vs. Royce Opportunity Fund |
| Barings Active vs. Tiaa Cref Smallmid Cap Equity | Barings Active vs. Small Cap Stock | Barings Active vs. The Gabelli Small | Barings Active vs. T Rowe Price |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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