Correlation Between Federated Ohio and Inflation-protected
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Inflation-protected 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 Inflation-protected 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 Inflation Protected Bond Fund, you can compare the effects of market volatilities on Federated Ohio and Inflation-protected 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 Inflation-protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Inflation-protected.
Diversification Opportunities for Federated Ohio and Inflation-protected
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between FEDERATED and Inflation-protected is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation-protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Federated Ohio i.e., Federated Ohio and Inflation-protected go up and down completely randomly.
Pair Corralation between Federated Ohio and Inflation-protected
Assuming the 90 days horizon Federated Ohio is expected to generate 3.1 times less return on investment than Inflation-protected. But when comparing it to its historical volatility, Federated Ohio Municipal is 2.47 times less risky than Inflation-protected. It trades about 0.09 of its potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 924.00 in Inflation Protected Bond Fund on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Inflation Protected Bond Fund or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Federated Ohio Municipal |
| Inflation Protected |
Federated Ohio and Inflation-protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Inflation-protected
The main advantage of trading using opposite Federated Ohio and Inflation-protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Inflation-protected 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 Inflation-protected will offset losses from the drop in Inflation-protected'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 |
| Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Advantage | Inflation-protected vs. Wells Fargo Ultra |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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