Correlation Between Federated Kaufmann and Floating Rate
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Floating Rate 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 Floating Rate 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 Floating Rate Fund, you can compare the effects of market volatilities on Federated Kaufmann and Floating Rate 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 Floating Rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Floating Rate.
Diversification Opportunities for Federated Kaufmann and Floating Rate
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Floating is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Floating Rate Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floating Rate 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 Floating Rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floating Rate has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Floating Rate go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Floating Rate
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 6.46 times more return on investment than Floating Rate. However, Federated Kaufmann is 6.46 times more volatile than Floating Rate Fund. It trades about 0.11 of its potential returns per unit of risk. Floating Rate Fund is currently generating about 0.23 per unit of risk. 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 |
Federated Kaufmann Large vs. Floating Rate Fund
Performance |
| Timeline |
| Federated Kaufmann Large |
| Floating Rate |
Federated Kaufmann and Floating Rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Floating Rate
The main advantage of trading using opposite Federated Kaufmann and Floating Rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Floating Rate 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 Floating Rate will offset losses from the drop in Floating Rate's long position.| 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 |
| Floating Rate vs. Growth Strategy Fund | Floating Rate vs. Black Oak Emerging | Floating Rate vs. Investec Emerging Markets | Floating Rate vs. Shelton Emerging Markets |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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