Correlation Between Federated Kaufmann and Federated Ohio
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Federated Ohio 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 Federated Ohio 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 Federated Ohio Municipal, you can compare the effects of market volatilities on Federated Kaufmann and Federated Ohio 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 Federated Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Federated Ohio.
Diversification Opportunities for Federated Kaufmann and Federated Ohio
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Federated is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Federated Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ohio Municipal 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 Federated Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ohio Municipal has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Federated Ohio go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Federated Ohio
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 5.03 times more return on investment than Federated Ohio. However, Federated Kaufmann is 5.03 times more volatile than Federated Ohio Municipal. It trades about 0.11 of its potential returns per unit of risk. Federated Ohio Municipal is currently generating about 0.1 per unit of risk. If you would invest 1,540 in Federated Kaufmann Large on September 4, 2024 and sell it today you would earn a total of 475.00 from holding Federated Kaufmann Large or generate 30.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Federated Ohio Municipal
Performance |
| Timeline |
| Federated Kaufmann Large |
| Federated Ohio Municipal |
Federated Kaufmann and Federated Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Federated Ohio
The main advantage of trading using opposite Federated Kaufmann and Federated Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Federated Ohio 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 Federated Ohio will offset losses from the drop in Federated Ohio'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 |
| Federated Ohio vs. Quantitative Longshort Equity | Federated Ohio vs. Limited Term Tax | Federated Ohio vs. Aqr Long Short Equity | Federated Ohio vs. Astor Longshort Fund |
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.
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