Correlation Between College Retirement and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both College Retirement 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 College Retirement and Federated Strategic 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 Strategic Income, you can compare the effects of market volatilities on College Retirement 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 College Retirement with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of College Retirement and Federated Strategic.
Diversification Opportunities for College Retirement and Federated Strategic
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between College and Federated is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding College Retirement Equities and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 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 College Retirement i.e., College Retirement and Federated Strategic go up and down completely randomly.
Pair Corralation between College Retirement and Federated Strategic
Assuming the 90 days trading horizon College Retirement Equities is expected to generate 2.68 times more return on investment than Federated Strategic. However, College Retirement is 2.68 times more volatile than Federated Strategic Income. It trades about 0.12 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.16 per unit of risk. If you would invest 34,408 in College Retirement Equities on October 24, 2024 and sell it today you would earn a total of 629.00 from holding College Retirement Equities or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
College Retirement Equities vs. Federated Strategic Income
Performance |
| Timeline |
| College Retirement |
| Federated Strategic |
College Retirement and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with College Retirement and Federated Strategic
The main advantage of trading using opposite College Retirement and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if College Retirement 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.| College Retirement vs. Qs Large Cap | College Retirement vs. Touchstone Large Cap | College Retirement vs. Qs Large Cap | College Retirement vs. Tiaa Cref Large Cap Value |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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