Correlation Between Ivy Energy and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Ivy Energy 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 Ivy Energy and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Energy Fund and Federated Strategic Income, you can compare the effects of market volatilities on Ivy Energy 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 Ivy Energy with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Energy and Federated Strategic.
Diversification Opportunities for Ivy Energy and Federated Strategic
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivy and Federated is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Energy Fund and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Ivy Energy 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 Ivy Energy Fund 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 Ivy Energy i.e., Ivy Energy and Federated Strategic go up and down completely randomly.
Pair Corralation between Ivy Energy and Federated Strategic
Assuming the 90 days horizon Ivy Energy Fund is expected to under-perform the Federated Strategic. In addition to that, Ivy Energy is 3.0 times more volatile than Federated Strategic Income. It trades about -0.01 of its total potential returns per unit of risk. Federated Strategic Income is currently generating about 0.1 per unit of volatility. If you would invest 752.00 in Federated Strategic Income on September 12, 2024 and sell it today you would earn a total of 84.00 from holding Federated Strategic Income or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivy Energy Fund vs. Federated Strategic Income
Performance |
| Timeline |
| Ivy Energy Fund |
| Federated Strategic |
Ivy Energy and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivy Energy and Federated Strategic
The main advantage of trading using opposite Ivy Energy and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Energy 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.| Ivy Energy vs. Enhanced Large Pany | Ivy Energy vs. Washington Mutual Investors | Ivy Energy vs. Qs Large Cap | Ivy Energy vs. Old Westbury Large |
| Federated Strategic vs. Pimco Income Fund | Federated Strategic vs. Pimco Income Fund | Federated Strategic vs. Pimco Incme Fund | Federated Strategic vs. Pimco Income Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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