Correlation Between Aberdeen and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Aberdeen and Federated Mdt 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 Aberdeen and Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Equity Instl and Federated Mdt Large, you can compare the effects of market volatilities on Aberdeen and Federated Mdt 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 Aberdeen with a short position of Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen and Federated Mdt.
Diversification Opportunities for Aberdeen and Federated Mdt
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aberdeen and FEDERATED is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Equity Instl and Federated Mdt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Large and Aberdeen 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 Aberdeen Equity Instl are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Large has no effect on the direction of Aberdeen i.e., Aberdeen and Federated Mdt go up and down completely randomly.
Pair Corralation between Aberdeen and Federated Mdt
Assuming the 90 days horizon Aberdeen is expected to generate 1.47 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, Aberdeen Equity Instl is 1.03 times less risky than Federated Mdt. It trades about 0.3 of its potential returns per unit of risk. Federated Mdt Large is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 3,497 in Federated Mdt Large on September 4, 2024 and sell it today you would earn a total of 255.00 from holding Federated Mdt Large or generate 7.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aberdeen Equity Instl vs. Federated Mdt Large
Performance |
| Timeline |
| Aberdeen Equity Instl |
| Federated Mdt Large |
Aberdeen and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen and Federated Mdt
The main advantage of trading using opposite Aberdeen and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen position performs unexpectedly, Federated Mdt 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 Mdt will offset losses from the drop in Federated Mdt's long position.| Aberdeen vs. Ab Small Cap | Aberdeen vs. Artisan Small Cap | Aberdeen vs. Small Midcap Dividend Income | Aberdeen vs. Small Pany Growth |
| Federated Mdt vs. Federated Max Cap Index | Federated Mdt vs. Federated Mdt Mid Cap | Federated Mdt vs. Federated Max Cap Index | Federated Mdt vs. Federated Global Allocation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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