Correlation Between Alternative Asset and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Alternative Asset and Federated Kaufmann 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 Alternative Asset and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Asset Allocation and Federated Kaufmann Large, you can compare the effects of market volatilities on Alternative Asset and Federated Kaufmann 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 Alternative Asset with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Asset and Federated Kaufmann.
Diversification Opportunities for Alternative Asset and Federated Kaufmann
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alternative and FEDERATED is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Asset Allocation and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large and Alternative Asset 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 Alternative Asset Allocation are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Alternative Asset i.e., Alternative Asset and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Alternative Asset and Federated Kaufmann
Assuming the 90 days horizon Alternative Asset is expected to generate 3.41 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Alternative Asset Allocation is 4.3 times less risky than Federated Kaufmann. It trades about 0.14 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,522 in Federated Kaufmann Large on September 2, 2024 and sell it today you would earn a total of 477.00 from holding Federated Kaufmann Large or generate 31.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Asset Allocation vs. Federated Kaufmann Large
Performance |
| Timeline |
| Alternative Asset |
| Federated Kaufmann Large |
Alternative Asset and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Asset and Federated Kaufmann
The main advantage of trading using opposite Alternative Asset and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Asset position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Alternative Asset vs. Strategic Income Opportunities | Alternative Asset vs. Global Absolute Return | Alternative Asset vs. Invesco Balanced Risk Allocation |
| Federated Kaufmann vs. The National Tax Free | Federated Kaufmann vs. Federated Ohio Municipal | Federated Kaufmann vs. Gamco Global Telecommunications | Federated Kaufmann vs. T Rowe Price |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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