Correlation Between Federated Mdt and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Federated Mdt and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Catalystmillburn.
Diversification Opportunities for Federated Mdt and Catalystmillburn
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Catalystmillburn is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Federated Mdt i.e., Federated Mdt and Catalystmillburn go up and down completely randomly.
Pair Corralation between Federated Mdt and Catalystmillburn
Assuming the 90 days horizon Federated Mdt Large is expected to under-perform the Catalystmillburn. In addition to that, Federated Mdt is 1.91 times more volatile than Catalystmillburn Hedge Strategy. It trades about -0.06 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.16 per unit of volatility. If you would invest 4,010 in Catalystmillburn Hedge Strategy on September 13, 2024 and sell it today you would earn a total of 39.00 from holding Catalystmillburn Hedge Strategy or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mdt Large vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Federated Mdt Large |
| Catalystmillburn Hedge |
Federated Mdt and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Catalystmillburn
The main advantage of trading using opposite Federated Mdt and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn'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 |
| Catalystmillburn vs. Extended Market Index | Catalystmillburn vs. Ashmore Emerging Markets | Catalystmillburn vs. Ep Emerging Markets | Catalystmillburn vs. Transamerica Emerging Markets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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