Correlation Between Voya High and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Voya High 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 Voya High and Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya High Yield and Federated Mdt All, you can compare the effects of market volatilities on Voya High 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 Voya High with a short position of Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya High and Federated Mdt.
Diversification Opportunities for Voya High and Federated Mdt
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VOYA and Federated is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Voya High Yield and Federated Mdt All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt All and Voya High 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 Voya High Yield 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 All has no effect on the direction of Voya High i.e., Voya High and Federated Mdt go up and down completely randomly.
Pair Corralation between Voya High and Federated Mdt
Assuming the 90 days horizon Voya High Yield is expected to generate 0.08 times more return on investment than Federated Mdt. However, Voya High Yield is 11.9 times less risky than Federated Mdt. It trades about -0.35 of its potential returns per unit of risk. Federated Mdt All is currently generating about -0.27 per unit of risk. If you would invest 882.00 in Voya High Yield on October 10, 2024 and sell it today you would lose (10.00) from holding Voya High Yield or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya High Yield vs. Federated Mdt All
Performance |
| Timeline |
| Voya High Yield |
| Federated Mdt All |
Voya High and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya High and Federated Mdt
The main advantage of trading using opposite Voya High and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya High 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.| Voya High vs. Nuveen Short Term | Voya High vs. Angel Oak Ultrashort | Voya High vs. Fidelity Flex Servative | Voya High vs. Abr Enhanced Short |
| Federated Mdt vs. Gabelli Gold Fund | Federated Mdt vs. World Precious Minerals | Federated Mdt vs. Precious Metals And | Federated Mdt vs. Gamco Global Gold |
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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