Correlation Between Federated Ohio and Mh Elite
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Mh Elite 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 Mh Elite 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 Mh Elite Fund, you can compare the effects of market volatilities on Federated Ohio and Mh Elite 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 Mh Elite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Mh Elite.
Diversification Opportunities for Federated Ohio and Mh Elite
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEDERATED and MHEFX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Mh Elite Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mh Elite Fund 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 Mh Elite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mh Elite Fund has no effect on the direction of Federated Ohio i.e., Federated Ohio and Mh Elite go up and down completely randomly.
Pair Corralation between Federated Ohio and Mh Elite
Assuming the 90 days horizon Federated Ohio is expected to generate 4.43 times less return on investment than Mh Elite. But when comparing it to its historical volatility, Federated Ohio Municipal is 2.23 times less risky than Mh Elite. It trades about 0.18 of its potential returns per unit of risk. Mh Elite Fund is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 903.00 in Mh Elite Fund on September 2, 2024 and sell it today you would earn a total of 47.00 from holding Mh Elite Fund or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Mh Elite Fund
Performance |
| Timeline |
| Federated Ohio Municipal |
| Mh Elite Fund |
Federated Ohio and Mh Elite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Mh Elite
The main advantage of trading using opposite Federated Ohio and Mh Elite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Mh Elite 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 Mh Elite will offset losses from the drop in Mh Elite'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 |
| Mh Elite vs. Ft 7934 Corporate | Mh Elite vs. Maryland Tax Free Bond | Mh Elite vs. Ultra Short Fixed Income | Mh Elite vs. Calamos Dynamic Convertible |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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