Correlation Between Federated Max-cap and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Federated Max-cap and Ab Bond 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 Max-cap and Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Max Cap Index and Ab Bond Inflation, you can compare the effects of market volatilities on Federated Max-cap and Ab Bond 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 Max-cap with a short position of Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Max-cap and Ab Bond.
Diversification Opportunities for Federated Max-cap and Ab Bond
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and ABNTX is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Federated Max Cap Index and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation and Federated Max-cap 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 Max Cap Index are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Federated Max-cap i.e., Federated Max-cap and Ab Bond go up and down completely randomly.
Pair Corralation between Federated Max-cap and Ab Bond
Assuming the 90 days horizon Federated Max Cap Index is expected to generate 6.25 times more return on investment than Ab Bond. However, Federated Max-cap is 6.25 times more volatile than Ab Bond Inflation. It trades about 0.02 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.11 per unit of risk. If you would invest 771.00 in Federated Max Cap Index on September 4, 2024 and sell it today you would earn a total of 42.00 from holding Federated Max Cap Index or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Max Cap Index vs. Ab Bond Inflation
Performance |
| Timeline |
| Federated Max Cap |
| Ab Bond Inflation |
Federated Max-cap and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Max-cap and Ab Bond
The main advantage of trading using opposite Federated Max-cap and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Max-cap position performs unexpectedly, Ab Bond 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Federated Max-cap vs. Transamerica Financial Life | Federated Max-cap vs. Davis Financial Fund | Federated Max-cap vs. Prudential Jennison Financial | Federated Max-cap vs. Mesirow Financial Small |
| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
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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