Correlation Between Federated Mdt and Aam Select
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Aam Select 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 Mdt and Aam Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mdt Large and Aam Select Income, you can compare the effects of market volatilities on Federated Mdt and Aam Select 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 Mdt with a short position of Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Aam Select.
Diversification Opportunities for Federated Mdt and Aam Select
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Aam is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income and Federated Mdt 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 Mdt Large are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Federated Mdt i.e., Federated Mdt and Aam Select go up and down completely randomly.
Pair Corralation between Federated Mdt and Aam Select
Assuming the 90 days horizon Federated Mdt Large is expected to under-perform the Aam Select. In addition to that, Federated Mdt is 9.14 times more volatile than Aam Select Income. It trades about -0.22 of its total potential returns per unit of risk. Aam Select Income is currently generating about 0.15 per unit of volatility. If you would invest 916.00 in Aam Select Income on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Aam Select Income or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mdt Large vs. Aam Select Income
Performance |
| Timeline |
| Federated Mdt Large |
| Aam Select Income |
Federated Mdt and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Aam Select
The main advantage of trading using opposite Federated Mdt and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select's long position.| Federated Mdt vs. Federated Max Cap Index | Federated Mdt vs. Federated Mdt Mid Cap | Federated Mdt vs. Federated Max Cap Index | Federated Mdt vs. Federated Global Allocation |
| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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