Correlation Between Federated Total and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Federated Total and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Small, you can compare the effects of market volatilities on Federated Total and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Total and Federated Kaufmann.
Diversification Opportunities for Federated Total and Federated Kaufmann
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Federated is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Federated Total Return and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Federated Total i.e., Federated Total and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Federated Total and Federated Kaufmann
Assuming the 90 days horizon Federated Total is expected to generate 11.21 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Federated Total Return is 3.84 times less risky than Federated Kaufmann. It trades about 0.07 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,298 in Federated Kaufmann Small on August 29, 2024 and sell it today you would earn a total of 320.00 from holding Federated Kaufmann Small or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Total Return vs. Federated Kaufmann Small
Performance |
| Timeline |
| Federated Total Return |
| Federated Kaufmann Small |
Federated Total and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Total and Federated Kaufmann
The main advantage of trading using opposite Federated Total and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Total position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Federated Total vs. Angel Oak Ultrashort | Federated Total vs. Siit Ultra Short | Federated Total vs. Rbc Short Duration | Federated Total vs. Federated Short Intermediate Duration |
| Federated Kaufmann vs. Tekla Healthcare Opportunities | Federated Kaufmann vs. Allianzgi Health Sciences | Federated Kaufmann vs. Baron Health Care | Federated Kaufmann vs. Prudential Health Sciences |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |