Correlation Between Federated Kaufmann and Enhanced
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Enhanced 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 Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Kaufmann Large and Enhanced Large Pany, you can compare the effects of market volatilities on Federated Kaufmann and Enhanced 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 Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Enhanced.
Diversification Opportunities for Federated Kaufmann and Enhanced
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Federated and Enhanced is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Enhanced Large Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhanced Large Pany 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 Large are associated (or correlated) with Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhanced Large Pany has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Enhanced go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Enhanced
Assuming the 90 days horizon Federated Kaufmann is expected to generate 2.14 times less return on investment than Enhanced. In addition to that, Federated Kaufmann is 1.88 times more volatile than Enhanced Large Pany. It trades about 0.03 of its total potential returns per unit of risk. Enhanced Large Pany is currently generating about 0.11 per unit of volatility. If you would invest 1,011 in Enhanced Large Pany on September 4, 2024 and sell it today you would earn a total of 557.00 from holding Enhanced Large Pany or generate 55.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Enhanced Large Pany
Performance |
| Timeline |
| Federated Kaufmann Large |
| Enhanced Large Pany |
Federated Kaufmann and Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Enhanced
The main advantage of trading using opposite Federated Kaufmann and Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Enhanced 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 Enhanced will offset losses from the drop in Enhanced's long position.| Federated Kaufmann vs. Gamco Natural Resources | Federated Kaufmann vs. Firsthand Alternative Energy | Federated Kaufmann vs. Clearbridge Energy Mlp | Federated Kaufmann vs. Salient Mlp Energy |
| Enhanced vs. Us Micro Cap | Enhanced vs. Dfa Short Term Government | Enhanced vs. Emerging Markets Small | Enhanced vs. Dfa One Year Fixed |
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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