Correlation Between Total Return and Federated Total
Can any of the company-specific risk be diversified away by investing in both Total Return 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 Total Return and Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Fund and Federated Total Return, you can compare the effects of market volatilities on Total Return 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 Total Return with a short position of Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Federated Total.
Diversification Opportunities for Total Return and Federated Total
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Total and Federated is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund 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 Total Return 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 Total Return Fund 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 Total Return i.e., Total Return and Federated Total go up and down completely randomly.
Pair Corralation between Total Return and Federated Total
Assuming the 90 days horizon Total Return Fund is expected to generate 1.02 times more return on investment than Federated Total. However, Total Return is 1.02 times more volatile than Federated Total Return. It trades about 0.04 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.03 per unit of risk. If you would invest 808.00 in Total Return Fund on September 4, 2024 and sell it today you would earn a total of 58.00 from holding Total Return Fund or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Total Return Fund vs. Federated Total Return
Performance |
| Timeline |
| Total Return |
| Federated Total Return |
Total Return and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Federated Total
The main advantage of trading using opposite Total Return and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return 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.| Total Return vs. Scharf Global Opportunity | Total Return vs. Qs Global Equity | Total Return vs. Fm Investments Large | Total Return vs. Touchstone Large Cap |
| Federated Total vs. Rationalpier 88 Convertible | Federated Total vs. Rationalpier 88 Convertible | Federated Total vs. Virtus Convertible | Federated Total vs. Lord Abbett Convertible |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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