Correlation Between Federated Global and Federated International
Can any of the company-specific risk be diversified away by investing in both Federated Global and Federated International 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 Global and Federated International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Total and Federated International Small Mid, you can compare the effects of market volatilities on Federated Global and Federated International 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 Global with a short position of Federated International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Federated International.
Diversification Opportunities for Federated Global and Federated International
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Federated is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Total and Federated International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated International and Federated Global 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 Global Total are associated (or correlated) with Federated International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated International has no effect on the direction of Federated Global i.e., Federated Global and Federated International go up and down completely randomly.
Pair Corralation between Federated Global and Federated International
Assuming the 90 days horizon Federated Global Total is expected to generate 0.42 times more return on investment than Federated International. However, Federated Global Total is 2.4 times less risky than Federated International. It trades about 0.06 of its potential returns per unit of risk. Federated International Small Mid is currently generating about 0.01 per unit of risk. If you would invest 768.00 in Federated Global Total on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Federated Global Total or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Total vs. Federated International Small
Performance |
| Timeline |
| Federated Global Total |
| Federated International |
Federated Global and Federated International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Federated International
The main advantage of trading using opposite Federated Global and Federated International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Federated International 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 Federated International will offset losses from the drop in Federated International's long position.| Federated Global vs. Fidelity Advisor Gold | Federated Global vs. Precious Metals And | Federated Global vs. Gamco Global Gold | Federated Global vs. Short Precious Metals |
| Federated International vs. T Rowe Price | Federated International vs. Vanguard Windsor Fund | Federated International vs. Volumetric Fund Volumetric | Federated International vs. Ab Small Cap |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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