Correlation Between Lsv Managed and Federated Institutional
Can any of the company-specific risk be diversified away by investing in both Lsv Managed and Federated Institutional 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 Lsv Managed and Federated Institutional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lsv Managed Volatility and Federated Institutional High, you can compare the effects of market volatilities on Lsv Managed and Federated Institutional 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 Lsv Managed with a short position of Federated Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lsv Managed and Federated Institutional.
Diversification Opportunities for Lsv Managed and Federated Institutional
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lsv and Federated is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Managed Volatility and Federated Institutional High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Institutional and Lsv Managed 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 Lsv Managed Volatility are associated (or correlated) with Federated Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Institutional has no effect on the direction of Lsv Managed i.e., Lsv Managed and Federated Institutional go up and down completely randomly.
Pair Corralation between Lsv Managed and Federated Institutional
Assuming the 90 days horizon Lsv Managed is expected to generate 1.7 times less return on investment than Federated Institutional. In addition to that, Lsv Managed is 3.48 times more volatile than Federated Institutional High. It trades about 0.02 of its total potential returns per unit of risk. Federated Institutional High is currently generating about 0.15 per unit of volatility. If you would invest 789.00 in Federated Institutional High on September 12, 2024 and sell it today you would earn a total of 108.00 from holding Federated Institutional High or generate 13.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lsv Managed Volatility vs. Federated Institutional High
Performance |
| Timeline |
| Lsv Managed Volatility |
| Federated Institutional |
Lsv Managed and Federated Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lsv Managed and Federated Institutional
The main advantage of trading using opposite Lsv Managed and Federated Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lsv Managed position performs unexpectedly, Federated Institutional 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 Institutional will offset losses from the drop in Federated Institutional's long position.| Lsv Managed vs. Scharf Global Opportunity | Lsv Managed vs. Commonwealth Global Fund | Lsv Managed vs. Kinetics Global Fund | Lsv Managed vs. Dreyfusstandish Global Fixed |
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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