Correlation Between Federated Ohio and Ambrus Core
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Ambrus Core 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 Ambrus Core 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 Ambrus Core Bond, you can compare the effects of market volatilities on Federated Ohio and Ambrus Core 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 Ambrus Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Ambrus Core.
Diversification Opportunities for Federated Ohio and Ambrus Core
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Ambrus is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Ambrus Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambrus Core Bond 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 Ambrus Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambrus Core Bond has no effect on the direction of Federated Ohio i.e., Federated Ohio and Ambrus Core go up and down completely randomly.
Pair Corralation between Federated Ohio and Ambrus Core
Assuming the 90 days horizon Federated Ohio is expected to generate 1.37 times less return on investment than Ambrus Core. But when comparing it to its historical volatility, Federated Ohio Municipal is 1.12 times less risky than Ambrus Core. It trades about 0.06 of its potential returns per unit of risk. Ambrus Core Bond is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Ambrus Core Bond on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Ambrus Core Bond or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Ambrus Core Bond
Performance |
| Timeline |
| Federated Ohio Municipal |
| Ambrus Core Bond |
Federated Ohio and Ambrus Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Ambrus Core
The main advantage of trading using opposite Federated Ohio and Ambrus Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Ambrus Core 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 Ambrus Core will offset losses from the drop in Ambrus Core's long position.| Federated Ohio vs. Gmo Resources | Federated Ohio vs. Fidelity Advisor Energy | Federated Ohio vs. Calvert Global Energy | Federated Ohio vs. Energy Basic Materials |
| Ambrus Core vs. Virtus High Yield | Ambrus Core vs. Pgim High Yield | Ambrus Core vs. Pioneer High Yield | Ambrus Core vs. Alpine High Yield |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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