Correlation Between Federated Ultrashort and Strategic Asset
Can any of the company-specific risk be diversified away by investing in both Federated Ultrashort and Strategic Asset 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 Ultrashort and Strategic Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ultrashort Bond and Strategic Asset Management, you can compare the effects of market volatilities on Federated Ultrashort and Strategic Asset 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 Ultrashort with a short position of Strategic Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ultrashort and Strategic Asset.
Diversification Opportunities for Federated Ultrashort and Strategic Asset
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FEDERATED and Strategic is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ultrashort Bond and Strategic Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Asset Mana and Federated Ultrashort 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 Ultrashort Bond are associated (or correlated) with Strategic Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Asset Mana has no effect on the direction of Federated Ultrashort i.e., Federated Ultrashort and Strategic Asset go up and down completely randomly.
Pair Corralation between Federated Ultrashort and Strategic Asset
Assuming the 90 days horizon Federated Ultrashort Bond is not expected to generate positive returns. However, Federated Ultrashort Bond is 5.33 times less risky than Strategic Asset. It waists most of its returns potential to compensate for thr risk taken. Strategic Asset is generating about 0.4 per unit of risk. If you would invest 1,256 in Strategic Asset Management on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Strategic Asset Management or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Ultrashort Bond vs. Strategic Asset Management
Performance |
| Timeline |
| Federated Ultrashort Bond |
| Strategic Asset Mana |
Federated Ultrashort and Strategic Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ultrashort and Strategic Asset
The main advantage of trading using opposite Federated Ultrashort and Strategic Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ultrashort position performs unexpectedly, Strategic Asset 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 Strategic Asset will offset losses from the drop in Strategic Asset's long position.| Federated Ultrashort vs. Federated Emerging Market | Federated Ultrashort vs. Federated Mdt All | Federated Ultrashort vs. Federated Mdt Balanced | Federated Ultrashort vs. Federated Global Allocation |
| Strategic Asset vs. Federated Ultrashort Bond | Strategic Asset vs. Ultra Short Fixed Income | Strategic Asset vs. Maryland Short Term Tax Free | Strategic Asset vs. Aqr Long Short Equity |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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