Correlation Between Federated Mdt and Federated Government
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Federated Government 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 Federated Mdt and Federated Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mdt Balanced and Federated Government Income, you can compare the effects of market volatilities on Federated Mdt and Federated Government 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 Federated Mdt with a short position of Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Federated Government.
Diversification Opportunities for Federated Mdt and Federated Government
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Federated is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Balanced and Federated Government Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government and Federated Mdt 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 Federated Mdt Balanced are associated (or correlated) with Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Federated Mdt i.e., Federated Mdt and Federated Government go up and down completely randomly.
Pair Corralation between Federated Mdt and Federated Government
Assuming the 90 days horizon Federated Mdt Balanced is expected to generate 1.76 times more return on investment than Federated Government. However, Federated Mdt is 1.76 times more volatile than Federated Government Income. It trades about 0.13 of its potential returns per unit of risk. Federated Government Income is currently generating about 0.05 per unit of risk. If you would invest 2,119 in Federated Mdt Balanced on October 20, 2024 and sell it today you would earn a total of 32.00 from holding Federated Mdt Balanced or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Federated Mdt Balanced vs. Federated Government Income
Performance |
| Timeline |
| Federated Mdt Balanced |
| Federated Government |
Federated Mdt and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Federated Government
The main advantage of trading using opposite Federated Mdt and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Federated Government 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 Government will offset losses from the drop in Federated Government's long position.| Federated Mdt vs. Doubleline Core Fixed | Federated Mdt vs. Old Westbury Fixed | Federated Mdt vs. Enhanced Fixed Income | Federated Mdt vs. Locorr Dynamic Equity |
| Federated Government vs. Nationwide Government Bond | Federated Government vs. Voya Government Money | Federated Government vs. Davis Government Bond | Federated Government vs. Intermediate Government Bond |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |