Correlation Between Federated Total and Blackrock
Can any of the company-specific risk be diversified away by investing in both Federated Total and Blackrock 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 Total and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Total Return and Blackrock Government Bond, you can compare the effects of market volatilities on Federated Total and Blackrock 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 Total with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Total and Blackrock.
Diversification Opportunities for Federated Total and Blackrock
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Blackrock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Federated Total Return and Blackrock Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Government Bond and Federated Total 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 Total Return are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Government Bond has no effect on the direction of Federated Total i.e., Federated Total and Blackrock go up and down completely randomly.
Pair Corralation between Federated Total and Blackrock
Assuming the 90 days horizon Federated Total is expected to generate 1.24 times less return on investment than Blackrock. But when comparing it to its historical volatility, Federated Total Return is 1.09 times less risky than Blackrock. It trades about 0.26 of its potential returns per unit of risk. Blackrock Government Bond is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 895.00 in Blackrock Government Bond on November 28, 2024 and sell it today you would earn a total of 18.00 from holding Blackrock Government Bond or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Total Return vs. Blackrock Government Bond
Performance |
| Timeline |
| Federated Total Return |
| Blackrock Government Bond |
Federated Total and Blackrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Total and Blackrock
The main advantage of trading using opposite Federated Total and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Total position performs unexpectedly, Blackrock 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 Blackrock will offset losses from the drop in Blackrock's long position.| Federated Total vs. Short Real Estate | Federated Total vs. Nexpoint Real Estate | Federated Total vs. Redwood Real Estate | Federated Total vs. Cohen Steers Real |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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