Correlation Between Federated Short-term and Ppm High
Can any of the company-specific risk be diversified away by investing in both Federated Short-term and Ppm High 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 Ppm High 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 Ppm High Yield, you can compare the effects of market volatilities on Federated Short-term and Ppm High 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 Ppm High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-term and Ppm High.
Diversification Opportunities for Federated Short-term and Ppm High
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Ppm is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Term Income and Ppm High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ppm High Yield 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 Ppm High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ppm High Yield has no effect on the direction of Federated Short-term i.e., Federated Short-term and Ppm High go up and down completely randomly.
Pair Corralation between Federated Short-term and Ppm High
Assuming the 90 days horizon Federated Short-term is expected to generate 1.76 times less return on investment than Ppm High. But when comparing it to its historical volatility, Federated Short Term Income is 1.77 times less risky than Ppm High. It trades about 0.16 of its potential returns per unit of risk. Ppm High Yield is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 771.00 in Ppm High Yield on September 2, 2024 and sell it today you would earn a total of 128.00 from holding Ppm High Yield or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Short Term Income vs. Ppm High Yield
Performance |
| Timeline |
| Federated Short Term |
| Ppm High Yield |
Federated Short-term and Ppm High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Short-term and Ppm High
The main advantage of trading using opposite Federated Short-term and Ppm High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short-term position performs unexpectedly, Ppm High 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 Ppm High will offset losses from the drop in Ppm High's long position.| Federated Short-term vs. Bbh Partner Fund | Federated Short-term vs. Scharf Global Opportunity | Federated Short-term vs. Arrow Managed Futures | Federated Short-term vs. Fa 529 Aggressive |
| Ppm High vs. Clearbridge Energy Mlp | Ppm High vs. Alpsalerian Energy Infrastructure | Ppm High vs. Gamco Natural Resources | Ppm High vs. Firsthand Alternative Energy |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |