Correlation Between Federated Ultrashort and Union Street
Can any of the company-specific risk be diversified away by investing in both Federated Ultrashort and Union Street 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 Union Street 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 Union Street Partners, you can compare the effects of market volatilities on Federated Ultrashort and Union Street 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 Union Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ultrashort and Union Street.
Diversification Opportunities for Federated Ultrashort and Union Street
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FEDERATED and Union is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ultrashort Bond and Union Street Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Street Partners 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 Union Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Street Partners has no effect on the direction of Federated Ultrashort i.e., Federated Ultrashort and Union Street go up and down completely randomly.
Pair Corralation between Federated Ultrashort and Union Street
Assuming the 90 days horizon Federated Ultrashort is expected to generate 7.62 times less return on investment than Union Street. But when comparing it to its historical volatility, Federated Ultrashort Bond is 6.52 times less risky than Union Street. It trades about 0.18 of its potential returns per unit of risk. Union Street Partners is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,878 in Union Street Partners on August 31, 2024 and sell it today you would earn a total of 95.00 from holding Union Street Partners or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ultrashort Bond vs. Union Street Partners
Performance |
| Timeline |
| Federated Ultrashort Bond |
| Union Street Partners |
Federated Ultrashort and Union Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ultrashort and Union Street
The main advantage of trading using opposite Federated Ultrashort and Union Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ultrashort position performs unexpectedly, Union Street 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 Union Street will offset losses from the drop in Union Street's long position.| Federated Ultrashort vs. Virtus Global Real | Federated Ultrashort vs. Allianzgi Mid Cap Fund | Federated Ultrashort vs. Virtus Select Mlp | Federated Ultrashort vs. Aquagold International |
| Union Street vs. Aqr Sustainable Long Short | Union Street vs. Sterling Capital Short | Union Street vs. Federated Ultrashort Bond | Union Street vs. Barings Active Short |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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