Correlation Between College Retirement and Federated Max
Can any of the company-specific risk be diversified away by investing in both College Retirement and Federated Max 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 College Retirement and Federated Max into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between College Retirement Equities and Federated Max Cap Index, you can compare the effects of market volatilities on College Retirement and Federated Max 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 College Retirement with a short position of Federated Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Federated Max.
Diversification Opportunities for College Retirement and Federated Max
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between College and Federated is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Federated Max Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Max Cap and College Retirement 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 College Retirement Equities are associated (or correlated) with Federated Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Max Cap has no effect on the direction of College Retirement i.e., College Retirement and Federated Max go up and down completely randomly.
Pair Corralation between College Retirement and Federated Max
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 0.62 times more return on investment than Federated Max. However, College Retirement Equities is 1.62 times less risky than Federated Max. It trades about 0.15 of its potential returns per unit of risk. Federated Max Cap Index is currently generating about 0.03 per unit of risk. If you would invest 30,429 in College Retirement Equities on November 3, 2024 and sell it today you would earn a total of 4,824 from holding College Retirement Equities or generate 15.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. Federated Max Cap Index
Performance |
| Timeline |
| College Retirement |
| Federated Max Cap |
College Retirement and Federated Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Federated Max
The main advantage of trading using opposite College Retirement and Federated Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement position performs unexpectedly, Federated Max 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 Max will offset losses from the drop in Federated Max's long position.| College Retirement vs. Fznopx | College Retirement vs. Fwnhtx | College Retirement vs. Fabwx | College Retirement vs. Flakqx |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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