Correlation Between Federated Ohio and Steward Large
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Steward Large 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 Steward Large 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 Steward Large Cap, you can compare the effects of market volatilities on Federated Ohio and Steward Large 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 Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Steward Large.
Diversification Opportunities for Federated Ohio and Steward Large
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Steward is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap 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 Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Federated Ohio i.e., Federated Ohio and Steward Large go up and down completely randomly.
Pair Corralation between Federated Ohio and Steward Large
Assuming the 90 days horizon Federated Ohio Municipal is expected to generate 0.28 times more return on investment than Steward Large. However, Federated Ohio Municipal is 3.61 times less risky than Steward Large. It trades about 0.2 of its potential returns per unit of risk. Steward Large Cap is currently generating about -0.11 per unit of risk. If you would invest 1,034 in Federated Ohio Municipal on December 1, 2024 and sell it today you would earn a total of 10.00 from holding Federated Ohio Municipal or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Steward Large Cap
Performance |
| Timeline |
| Federated Ohio Municipal |
| Steward Large Cap |
Federated Ohio and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Steward Large
The main advantage of trading using opposite Federated Ohio and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large's long position.| Federated Ohio vs. Cmg Ultra Short | Federated Ohio vs. Virtus Multi Sector Short | Federated Ohio vs. Transamerica Short Term Bond | Federated Ohio vs. T Rowe Price |
| Steward Large vs. Dws Emerging Markets | Steward Large vs. Pnc Emerging Markets | Steward Large vs. Hartford Schroders Emerging | Steward Large vs. Artisan Developing World |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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