Correlation Between Arrow Managed and Federated Global
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Federated Global 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 Arrow Managed and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Federated Global Allocation, you can compare the effects of market volatilities on Arrow Managed and Federated Global 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 Arrow Managed with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Federated Global.
Diversification Opportunities for Arrow Managed and Federated Global
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Arrow and FEDERATED is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Arrow 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 Arrow Managed Futures are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Arrow Managed i.e., Arrow Managed and Federated Global go up and down completely randomly.
Pair Corralation between Arrow Managed and Federated Global
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 2.08 times more return on investment than Federated Global. However, Arrow Managed is 2.08 times more volatile than Federated Global Allocation. It trades about 0.09 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.07 per unit of risk. If you would invest 570.00 in Arrow Managed Futures on October 20, 2024 and sell it today you would earn a total of 11.00 from holding Arrow Managed Futures or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Federated Global Allocation
Performance |
| Timeline |
| Arrow Managed Futures |
| Federated Global All |
Arrow Managed and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Federated Global
The main advantage of trading using opposite Arrow Managed and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Federated Global 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 Global will offset losses from the drop in Federated Global's long position.| Arrow Managed vs. Ab High Income | Arrow Managed vs. Msift High Yield | Arrow Managed vs. Pace High Yield | Arrow Managed vs. Millerhoward High Income |
| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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