Correlation Between Federated Kaufmann and Victory Strategic
Can any of the company-specific risk be diversified away by investing in both Federated Kaufmann and Victory Strategic 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 Victory Strategic 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 Victory Strategic Allocation, you can compare the effects of market volatilities on Federated Kaufmann and Victory Strategic 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 Victory Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Kaufmann and Victory Strategic.
Diversification Opportunities for Federated Kaufmann and Victory Strategic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and VICTORY is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated Kaufmann Large and Victory Strategic Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Strategic 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 Victory Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Strategic has no effect on the direction of Federated Kaufmann i.e., Federated Kaufmann and Victory Strategic go up and down completely randomly.
Pair Corralation between Federated Kaufmann and Victory Strategic
Assuming the 90 days horizon Federated Kaufmann Large is expected to generate 2.27 times more return on investment than Victory Strategic. However, Federated Kaufmann is 2.27 times more volatile than Victory Strategic Allocation. It trades about 0.2 of its potential returns per unit of risk. Victory Strategic Allocation is currently generating about 0.15 per unit of risk. If you would invest 1,901 in Federated Kaufmann Large on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Federated Kaufmann Large or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Kaufmann Large vs. Victory Strategic Allocation
Performance |
| Timeline |
| Federated Kaufmann Large |
| Victory Strategic |
Federated Kaufmann and Victory Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Kaufmann and Victory Strategic
The main advantage of trading using opposite Federated Kaufmann and Victory Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Kaufmann position performs unexpectedly, Victory Strategic 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 Victory Strategic will offset losses from the drop in Victory Strategic's long position.| Federated Kaufmann vs. Europacific Growth Fund | Federated Kaufmann vs. Washington Mutual Investors | Federated Kaufmann vs. Capital World Growth | Federated Kaufmann vs. HUMANA INC |
| Victory Strategic vs. HUMANA INC | Victory Strategic vs. SCOR PK | Victory Strategic vs. Aquagold International | Victory Strategic vs. Thrivent High Yield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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