Correlation Between Federated Pennsylvania and Pace Large
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania and Pace 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 Pace 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 Pace Large Value, you can compare the effects of market volatilities on Federated Pennsylvania and Pace 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 Pace Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Pace Large.
Diversification Opportunities for Federated Pennsylvania and Pace Large
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Pace is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Pace Large Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Large Value 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 Pace Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Large Value has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Pace Large go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Pace Large
Assuming the 90 days horizon Federated Pennsylvania Municipal is expected to generate 0.27 times more return on investment than Pace Large. However, Federated Pennsylvania Municipal is 3.76 times less risky than Pace Large. It trades about 0.39 of its potential returns per unit of risk. Pace Large Value is currently generating about -0.11 per unit of risk. If you would invest 1,005 in Federated Pennsylvania Municipal on September 12, 2024 and sell it today you would earn a total of 11.00 from holding Federated Pennsylvania Municipal or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Pace Large Value
Performance |
| Timeline |
| Federated Pennsylvania |
| Pace Large Value |
Federated Pennsylvania and Pace Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Pace Large
The main advantage of trading using opposite Federated Pennsylvania and Pace Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania position performs unexpectedly, Pace 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 Pace Large will offset losses from the drop in Pace Large's long position.| Federated Pennsylvania vs. Balanced Fund Investor | Federated Pennsylvania vs. Multimedia Portfolio Multimedia | Federated Pennsylvania vs. T Rowe Price | Federated Pennsylvania vs. L Abbett Fundamental |
| Pace Large vs. Vanguard Value Index | Pace Large vs. Dodge Cox Stock | Pace Large vs. American Mutual Fund | Pace Large vs. American Funds American |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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