Correlation Between Pace Smallmedium and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Pace Smallmedium and Federated Strategic 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 Pace Smallmedium and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Smallmedium Value and Federated Strategic Income, you can compare the effects of market volatilities on Pace Smallmedium and Federated Strategic 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 Pace Smallmedium with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Smallmedium and Federated Strategic.
Diversification Opportunities for Pace Smallmedium and Federated Strategic
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pace and Federated is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Value and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Pace Smallmedium 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 Pace Smallmedium Value are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Pace Smallmedium i.e., Pace Smallmedium and Federated Strategic go up and down completely randomly.
Pair Corralation between Pace Smallmedium and Federated Strategic
Assuming the 90 days horizon Pace Smallmedium is expected to generate 1.09 times less return on investment than Federated Strategic. In addition to that, Pace Smallmedium is 3.91 times more volatile than Federated Strategic Income. It trades about 0.04 of its total potential returns per unit of risk. Federated Strategic Income is currently generating about 0.17 per unit of volatility. If you would invest 819.00 in Federated Strategic Income on September 15, 2024 and sell it today you would earn a total of 6.00 from holding Federated Strategic Income or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Smallmedium Value vs. Federated Strategic Income
Performance |
| Timeline |
| Pace Smallmedium Value |
| Federated Strategic |
Pace Smallmedium and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Smallmedium and Federated Strategic
The main advantage of trading using opposite Pace Smallmedium and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Smallmedium position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.| Pace Smallmedium vs. Touchstone Large Cap | Pace Smallmedium vs. Virtus Nfj Large Cap | Pace Smallmedium vs. Dodge Cox Stock | Pace Smallmedium vs. Dana Large Cap |
| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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