Correlation Between Federated Kaufmann and Pace International
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Pace International 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 Pace International 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 Pace International Emerging, you can compare the effects of market volatilities on Federated Kaufmann and Pace International 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 Pace International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Pace International.
Diversification Opportunities for Federated Kaufmann and Pace International
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federated and PACE is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Pace International Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace International 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 Pace International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace International has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Pace International go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Pace International
Assuming the 90 days horizon Federated Kaufmann Large is expected to under-perform the Pace International. In addition to that, Federated Kaufmann is 1.17 times more volatile than Pace International Emerging. It trades about -0.19 of its total potential returns per unit of risk. Pace International Emerging is currently generating about 0.25 per unit of volatility. If you would invest 1,310 in Pace International Emerging on November 29, 2024 and sell it today you would earn a total of 52.00 from holding Pace International Emerging or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Pace International Emerging
Performance |
| Timeline |
| Federated Kaufmann Large |
| Pace International |
Federated Kaufmann and Pace International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Pace International
The main advantage of trading using opposite Federated Kaufmann and Pace International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Pace International 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 Pace International will offset losses from the drop in Pace International's long position.| Federated Kaufmann vs. Fisher Large Cap | Federated Kaufmann vs. Ab Large Cap | Federated Kaufmann vs. Profunds Large Cap Growth | Federated Kaufmann vs. Fidelity Large Cap |
| Pace International vs. Alternative Asset Allocation | Pace International vs. Credit Suisse Multialternative | Pace International vs. Glg Intl Small | Pace International vs. Versatile Bond Portfolio |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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