Correlation Between Growth Fund and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Federated Kaufmann Large, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Federated Kaufmann.
Diversification Opportunities for Growth Fund and Federated Kaufmann
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Growth and Federated is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large and Growth Fund 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 Growth Fund Of 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 Large has no effect on the direction of Growth Fund i.e., Growth Fund and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Growth Fund and Federated Kaufmann
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.95 times more return on investment than Federated Kaufmann. However, Growth Fund Of is 1.05 times less risky than Federated Kaufmann. It trades about 0.22 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.21 per unit of risk. If you would invest 7,268 in Growth Fund Of on September 3, 2024 and sell it today you would earn a total of 908.00 from holding Growth Fund Of or generate 12.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Federated Kaufmann Large
Performance |
| Timeline |
| Growth Fund |
| Federated Kaufmann Large |
Growth Fund and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Federated Kaufmann
The main advantage of trading using opposite Growth Fund and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Europacific Growth Fund | Growth Fund vs. Capital World Growth | Growth Fund vs. American Funds Fundamental | Growth Fund vs. Washington Mutual Investors |
| Federated Kaufmann vs. American Funds The | Federated Kaufmann vs. American Funds The | Federated Kaufmann vs. Growth Fund Of | Federated Kaufmann vs. Growth Fund Of |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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