Correlation Between Federated Kaufmann and Delaware Tax-free
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Delaware Tax-free 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 Delaware Tax-free 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 Delaware Tax Free Usa, you can compare the effects of market volatilities on Federated Kaufmann and Delaware Tax-free 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 Delaware Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Delaware Tax-free.
Diversification Opportunities for Federated Kaufmann and Delaware Tax-free
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEDERATED and Delaware is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Delaware Tax Free Usa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Tax Free 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 Delaware Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Tax Free has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Delaware Tax-free go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Delaware Tax-free
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 1.87 times more return on investment than Delaware Tax-free. However, Federated Kaufmann is 1.87 times more volatile than Delaware Tax Free Usa. It trades about 0.38 of its potential returns per unit of risk. Delaware Tax Free Usa is currently generating about 0.17 per unit of risk. If you would invest 1,862 in Federated Kaufmann Large on September 1, 2024 and sell it today you would earn a total of 137.00 from holding Federated Kaufmann Large or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Delaware Tax Free Usa
Performance |
| Timeline |
| Federated Kaufmann Large |
| Delaware Tax Free |
Federated Kaufmann and Delaware Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Delaware Tax-free
The main advantage of trading using opposite Federated Kaufmann and Delaware Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Delaware Tax-free 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 Delaware Tax-free will offset losses from the drop in Delaware Tax-free's long position.| Federated Kaufmann vs. Federated Emerging Market | Federated Kaufmann vs. Federated Mdt All | Federated Kaufmann vs. Federated Mdt Balanced | Federated Kaufmann vs. Federated Global Allocation |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |