Correlation Between Federated Kaufmann and Invesco Low
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Invesco Low 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 Invesco Low 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 Invesco Low Volatility, you can compare the effects of market volatilities on Federated Kaufmann and Invesco Low 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 Invesco Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Invesco Low.
Diversification Opportunities for Federated Kaufmann and Invesco Low
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Invesco is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Invesco Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Low Volatility 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 Invesco Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Low Volatility has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Invesco Low go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Invesco Low
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 1.6 times more return on investment than Invesco Low. However, Federated Kaufmann is 1.6 times more volatile than Invesco Low Volatility. It trades about 0.36 of its potential returns per unit of risk. Invesco Low Volatility is currently generating about 0.36 per unit of risk. If you would invest 1,877 in Federated Kaufmann Large on September 4, 2024 and sell it today you would earn a total of 130.00 from holding Federated Kaufmann Large or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Invesco Low Volatility
Performance |
| Timeline |
| Federated Kaufmann Large |
| Invesco Low Volatility |
Federated Kaufmann and Invesco Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Invesco Low
The main advantage of trading using opposite Federated Kaufmann and Invesco Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Invesco Low 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 Invesco Low will offset losses from the drop in Invesco Low'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 |
| Invesco Low vs. Absolute Convertible Arbitrage | Invesco Low vs. Advent Claymore Convertible | Invesco Low vs. Gabelli Convertible And | Invesco Low vs. Allianzgi Convertible Income |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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