Correlation Between Federated Intermediate and Federated Equity
Can any of the company-specific risk be diversified away by investing in both Federated Intermediate and Federated Equity 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 Intermediate and Federated Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Intermediate Porate and Federated Equity Income, you can compare the effects of market volatilities on Federated Intermediate and Federated Equity 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 Intermediate with a short position of Federated Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Intermediate and Federated Equity.
Diversification Opportunities for Federated Intermediate and Federated Equity
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Federated is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Federated Intermediate Porate and Federated Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Equity Income and Federated Intermediate 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 Intermediate Porate are associated (or correlated) with Federated Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Equity Income has no effect on the direction of Federated Intermediate i.e., Federated Intermediate and Federated Equity go up and down completely randomly.
Pair Corralation between Federated Intermediate and Federated Equity
Assuming the 90 days horizon Federated Intermediate Porate is expected to under-perform the Federated Equity. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Intermediate Porate is 2.98 times less risky than Federated Equity. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Federated Equity Income is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,563 in Federated Equity Income on August 28, 2024 and sell it today you would earn a total of 90.00 from holding Federated Equity Income or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Intermediate Porate vs. Federated Equity Income
Performance |
| Timeline |
| Federated Intermediate |
| Federated Equity Income |
Federated Intermediate and Federated Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Intermediate and Federated Equity
The main advantage of trading using opposite Federated Intermediate and Federated Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Intermediate position performs unexpectedly, Federated Equity 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 Equity will offset losses from the drop in Federated Equity's long position.| Federated Intermediate vs. Federated Emerging Market | Federated Intermediate vs. Federated Mdt All | Federated Intermediate vs. Federated Mdt Balanced | Federated Intermediate vs. Federated Global Allocation |
| Federated Equity vs. Federated Emerging Market | Federated Equity vs. Federated Mdt All | Federated Equity vs. Federated Global Allocation | Federated Equity vs. Federated Hermes Emerging |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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