Correlation Between Mutual Of and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Mutual Of and Federated 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 Mutual Of and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mutual Of America and Federated Strategic Value, you can compare the effects of market volatilities on Mutual Of and Federated 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 Mutual Of with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Federated Strategic.
Diversification Opportunities for Mutual Of and Federated Strategic
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mutual and Federated is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value and Mutual Of 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 Mutual Of America are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Mutual Of i.e., Mutual Of and Federated Strategic go up and down completely randomly.
Pair Corralation between Mutual Of and Federated Strategic
Assuming the 90 days horizon Mutual Of America is expected to generate 1.15 times more return on investment than Federated Strategic. However, Mutual Of is 1.15 times more volatile than Federated Strategic Value. It trades about -0.1 of its potential returns per unit of risk. Federated Strategic Value is currently generating about -0.31 per unit of risk. If you would invest 1,643 in Mutual Of America on September 12, 2024 and sell it today you would lose (28.00) from holding Mutual Of America or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mutual Of America vs. Federated Strategic Value
Performance |
| Timeline |
| Mutual Of America |
| Federated Strategic Value |
Mutual Of and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mutual Of and Federated Strategic
The main advantage of trading using opposite Mutual Of and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of position performs unexpectedly, Federated 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Mutual Of vs. Blackrock Inflation Protected | Mutual Of vs. American Funds Inflation | Mutual Of vs. Atac Inflation Rotation | Mutual Of vs. Ab Bond Inflation |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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