Correlation Between Federated Pennsylvania and Eventide Large
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania and Eventide 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 Pennsylvania and Eventide Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Pennsylvania Municipal and Eventide Large Cap, you can compare the effects of market volatilities on Federated Pennsylvania and Eventide 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 Pennsylvania with a short position of Eventide Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Eventide Large.
Diversification Opportunities for Federated Pennsylvania and Eventide Large
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Eventide is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Eventide Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventide Large Cap and Federated Pennsylvania 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 Pennsylvania Municipal are associated (or correlated) with Eventide Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventide Large Cap has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Eventide Large go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Eventide Large
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 0.18 times more return on investment than Eventide Large. However, Federated Pennsylvania Municipal is 5.65 times less risky than Eventide Large. It trades about 0.34 of its potential returns per unit of risk. Eventide Large Cap is currently generating about -0.1 per unit of risk. If you would invest 1,005 in Federated Pennsylvania Municipal on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Federated Pennsylvania Municipal or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Eventide Large Cap
Performance |
| Timeline |
| Federated Pennsylvania |
| Eventide Large Cap |
Federated Pennsylvania and Eventide Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Eventide Large
The main advantage of trading using opposite Federated Pennsylvania and Eventide Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania position performs unexpectedly, Eventide 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 Eventide Large will offset losses from the drop in Eventide Large's long position.| Federated Pennsylvania vs. Goehring Rozencwajg Resources | Federated Pennsylvania vs. Hennessy Bp Energy | Federated Pennsylvania vs. Gmo Resources | Federated Pennsylvania vs. Gamco Natural Resources |
| Eventide Large vs. Locorr Dynamic Equity | Eventide Large vs. Calamos Global Equity | Eventide Large vs. Scharf Fund Retail | Eventide Large vs. Gmo Global Equity |
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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