Correlation Between Federated Kaufmann and Retirement Living
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Retirement Living 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 Retirement Living 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 Retirement Living Through, you can compare the effects of market volatilities on Federated Kaufmann and Retirement Living 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 Retirement Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Retirement Living.
Diversification Opportunities for Federated Kaufmann and Retirement Living
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Retirement is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Retirement Living Through in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retirement Living Through 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 Retirement Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retirement Living Through has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Retirement Living go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Retirement Living
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 1.96 times more return on investment than Retirement Living. However, Federated Kaufmann is 1.96 times more volatile than Retirement Living Through. It trades about 0.38 of its potential returns per unit of risk. Retirement Living Through is currently generating about 0.35 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 Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Retirement Living Through
Performance |
| Timeline |
| Federated Kaufmann Large |
| Retirement Living Through |
Federated Kaufmann and Retirement Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Retirement Living
The main advantage of trading using opposite Federated Kaufmann and Retirement Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Retirement Living 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 Retirement Living will offset losses from the drop in Retirement Living'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 |
| Retirement Living vs. Federated Kaufmann Large | Retirement Living vs. T Rowe Price | Retirement Living vs. Victory Strategic Allocation | Retirement Living 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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