Correlation Between Federated Kaufmann and Ridgeworth Ceredex
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Ridgeworth Ceredex 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 Ridgeworth Ceredex 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 Ridgeworth Ceredex Large, you can compare the effects of market volatilities on Federated Kaufmann and Ridgeworth Ceredex 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 Ridgeworth Ceredex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Ridgeworth Ceredex.
Diversification Opportunities for Federated Kaufmann and Ridgeworth Ceredex
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between FEDERATED and Ridgeworth is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Ridgeworth Ceredex Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ridgeworth Ceredex Large 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 Ridgeworth Ceredex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ridgeworth Ceredex Large has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Ridgeworth Ceredex go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Ridgeworth Ceredex
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 1.3 times more return on investment than Ridgeworth Ceredex. However, Federated Kaufmann is 1.3 times more volatile than Ridgeworth Ceredex Large. It trades about 0.11 of its potential returns per unit of risk. Ridgeworth Ceredex Large is currently generating about 0.11 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Ridgeworth Ceredex Large
Performance |
| Timeline |
| Federated Kaufmann Large |
| Ridgeworth Ceredex Large |
Federated Kaufmann and Ridgeworth Ceredex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Ridgeworth Ceredex
The main advantage of trading using opposite Federated Kaufmann and Ridgeworth Ceredex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Ridgeworth Ceredex 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 Ridgeworth Ceredex will offset losses from the drop in Ridgeworth Ceredex'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 |
| Ridgeworth Ceredex vs. Virtus Multi Strategy Target | Ridgeworth Ceredex vs. Virtus Multi Sector Short | Ridgeworth Ceredex vs. Ridgeworth Seix High | Ridgeworth Ceredex vs. Ridgeworth Innovative Growth |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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