Correlation Between Pace High and Federated Total
Can any of the company-specific risk be diversified away by investing in both Pace High and Federated Total 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 High and Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace High Yield and Federated Total Return, you can compare the effects of market volatilities on Pace High and Federated Total 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 High with a short position of Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace High and Federated Total.
Diversification Opportunities for Pace High and Federated Total
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pace and Federated is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return and Pace High 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 High Yield are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Pace High i.e., Pace High and Federated Total go up and down completely randomly.
Pair Corralation between Pace High and Federated Total
Assuming the 90 days horizon Pace High Yield is expected to generate 0.49 times more return on investment than Federated Total. However, Pace High Yield is 2.05 times less risky than Federated Total. It trades about 0.21 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.04 per unit of risk. If you would invest 826.00 in Pace High Yield on November 3, 2024 and sell it today you would earn a total of 70.00 from holding Pace High Yield or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace High Yield vs. Federated Total Return
Performance |
| Timeline |
| Pace High Yield |
| Federated Total Return |
Pace High and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace High and Federated Total
The main advantage of trading using opposite Pace High and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Pace High vs. Goldman Sachs High | Pace High vs. Barings High Yield | Pace High vs. Gugg Actv Invmt | Pace High vs. Ironclad Managed Risk |
| Federated Total vs. Pgim Jennison Technology | Federated Total vs. Global Technology Portfolio | Federated Total vs. Hennessy Technology Fund | Federated Total vs. Firsthand Technology Opportunities |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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