Correlation Between Federated Pennsylvania and Transamerica Funds
Can any of the company-specific risk be diversified away by investing in both Federated Pennsylvania and Transamerica Funds 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 Transamerica Funds 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 Transamerica Funds , you can compare the effects of market volatilities on Federated Pennsylvania and Transamerica Funds 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 Transamerica Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Pennsylvania and Transamerica Funds.
Diversification Opportunities for Federated Pennsylvania and Transamerica Funds
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FEDERATED and Transamerica is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Federated Pennsylvania Municip and Transamerica Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Funds 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 Transamerica Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Funds has no effect on the direction of Federated Pennsylvania i.e., Federated Pennsylvania and Transamerica Funds go up and down completely randomly.
Pair Corralation between Federated Pennsylvania and Transamerica Funds
If you would invest 1,004 in Federated Pennsylvania Municipal on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Federated Pennsylvania Municipal or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Federated Pennsylvania Municip vs. Transamerica Funds
Performance |
| Timeline |
| Federated Pennsylvania |
| Transamerica Funds |
Federated Pennsylvania and Transamerica Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Pennsylvania and Transamerica Funds
The main advantage of trading using opposite Federated Pennsylvania and Transamerica Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Pennsylvania position performs unexpectedly, Transamerica Funds 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 Transamerica Funds will offset losses from the drop in Transamerica Funds' long position.| Federated Pennsylvania vs. Federated Emerging Market | Federated Pennsylvania vs. Federated Mdt All | Federated Pennsylvania vs. Federated Mdt Balanced | Federated Pennsylvania vs. Federated Global Allocation |
| Transamerica Funds vs. Vanguard Total Stock | Transamerica Funds vs. Vanguard 500 Index | Transamerica Funds vs. Vanguard Total Stock | Transamerica Funds vs. Vanguard Total Stock |
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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