Correlation Between Mairs Power and Federated High
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Federated High 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 Mairs Power and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Federated High Yield, you can compare the effects of market volatilities on Mairs Power and Federated High 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 Mairs Power with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Federated High.
Diversification Opportunities for Mairs Power and Federated High
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mairs and Federated is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and Mairs Power 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 Mairs Power Growth are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Mairs Power i.e., Mairs Power and Federated High go up and down completely randomly.
Pair Corralation between Mairs Power and Federated High
Assuming the 90 days horizon Mairs Power is expected to generate 1.01 times less return on investment than Federated High. In addition to that, Mairs Power is 4.25 times more volatile than Federated High Yield. It trades about 0.04 of its total potential returns per unit of risk. Federated High Yield is currently generating about 0.18 per unit of volatility. If you would invest 609.00 in Federated High Yield on October 25, 2024 and sell it today you would earn a total of 31.00 from holding Federated High Yield or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Federated High Yield
Performance |
| Timeline |
| Mairs Power Growth |
| Federated High Yield |
Mairs Power and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Federated High
The main advantage of trading using opposite Mairs Power and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Federated High 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 High will offset losses from the drop in Federated High's long position.| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
| Federated High vs. Jpmorgan High Yield | Federated High vs. Lord Abbett Short | Federated High vs. T Rowe Price | Federated High vs. Voya 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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