Correlation Between Federated Kaufmann and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Arrow Managed 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 Kaufmann and Arrow Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Kaufmann Fund and Arrow Managed Futures, you can compare the effects of market volatilities on Federated Kaufmann and Arrow Managed 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 Kaufmann with a short position of Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Arrow Managed.
Diversification Opportunities for Federated Kaufmann and Arrow Managed
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Arrow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Fund and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures and Federated Kaufmann 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 Kaufmann Fund are associated (or correlated) with Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Arrow Managed go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Arrow Managed
Assuming the 90 days horizon Federated Kaufmann Fund is expected to generate 2.1 times more return on investment than Arrow Managed. However, Federated Kaufmann is 2.1 times more volatile than Arrow Managed Futures. It trades about -0.07 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about -0.3 per unit of risk. If you would invest 351.00 in Federated Kaufmann Fund on January 14, 2025 and sell it today you would lose (20.00) from holding Federated Kaufmann Fund or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Fund vs. Arrow Managed Futures
Performance |
| Timeline |
| Federated Kaufmann |
| Arrow Managed Futures |
Federated Kaufmann and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Arrow Managed
The main advantage of trading using opposite Federated Kaufmann and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Federated Kaufmann vs. Goldman Sachs Short | Federated Kaufmann vs. Old Westbury California | Federated Kaufmann vs. Legg Mason Partners | Federated Kaufmann vs. Baird Quality Intermediate |
| Arrow Managed vs. Touchstone Large Cap | Arrow Managed vs. M Large Cap | Arrow Managed vs. Fidelity Large Cap | Arrow Managed vs. Calvert Large Cap |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |