Correlation Between Federated Ohio and Delaware Extended
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Delaware Extended 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 Ohio and Delaware Extended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Delaware Extended Duration, you can compare the effects of market volatilities on Federated Ohio and Delaware Extended 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 Ohio with a short position of Delaware Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Delaware Extended.
Diversification Opportunities for Federated Ohio and Delaware Extended
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and Delaware is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Delaware Extended Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Extended and Federated Ohio 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 Ohio Municipal are associated (or correlated) with Delaware Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Extended has no effect on the direction of Federated Ohio i.e., Federated Ohio and Delaware Extended go up and down completely randomly.
Pair Corralation between Federated Ohio and Delaware Extended
Assuming the 90 days horizon Federated Ohio is expected to generate 2.4 times less return on investment than Delaware Extended. But when comparing it to its historical volatility, Federated Ohio Municipal is 2.69 times less risky than Delaware Extended. It trades about 0.18 of its potential returns per unit of risk. Delaware Extended Duration is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,421 in Delaware Extended Duration on September 2, 2024 and sell it today you would earn a total of 39.00 from holding Delaware Extended Duration or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Delaware Extended Duration
Performance |
| Timeline |
| Federated Ohio Municipal |
| Delaware Extended |
Federated Ohio and Delaware Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Delaware Extended
The main advantage of trading using opposite Federated Ohio and Delaware Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Delaware Extended 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 Delaware Extended will offset losses from the drop in Delaware Extended's long position.| Federated Ohio vs. Federated Emerging Market | Federated Ohio vs. Federated Mdt All | Federated Ohio vs. Federated Mdt Balanced | Federated Ohio vs. Federated Global Allocation |
| Delaware Extended vs. Optimum Small Mid Cap | Delaware Extended vs. Optimum Small Mid Cap | Delaware Extended vs. Ivy Apollo Multi Asset | Delaware Extended vs. Optimum Fixed Income |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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