Correlation Between Quantitative Longshort and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Quantitative Longshort and Federated Strategic 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 Quantitative Longshort and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Federated Strategic Income, you can compare the effects of market volatilities on Quantitative Longshort and Federated Strategic 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 Quantitative Longshort with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative Longshort and Federated Strategic.
Diversification Opportunities for Quantitative Longshort and Federated Strategic
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Quantitative and Federated is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Quantitative Longshort 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 Quantitative Longshort Equity are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Quantitative Longshort i.e., Quantitative Longshort and Federated Strategic go up and down completely randomly.
Pair Corralation between Quantitative Longshort and Federated Strategic
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 1.32 times more return on investment than Federated Strategic. However, Quantitative Longshort is 1.32 times more volatile than Federated Strategic Income. It trades about 0.15 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.13 per unit of risk. If you would invest 1,283 in Quantitative Longshort Equity on September 3, 2024 and sell it today you would earn a total of 187.00 from holding Quantitative Longshort Equity or generate 14.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Federated Strategic Income
Performance |
| Timeline |
| Quantitative Longshort |
| Federated Strategic |
Quantitative Longshort and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative Longshort and Federated Strategic
The main advantage of trading using opposite Quantitative Longshort and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative Longshort position performs unexpectedly, Federated Strategic 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 Strategic will offset losses from the drop in Federated Strategic's long position.| Quantitative Longshort vs. Neuberger Berman Long | Quantitative Longshort vs. Diamond Hill Long Short | Quantitative Longshort vs. Diamond Hill Long 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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