Correlation Between Federated Mdt and Needham Aggressive
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Needham Aggressive 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 Needham Aggressive 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 Needham Aggressive Growth, you can compare the effects of market volatilities on Federated Mdt and Needham Aggressive 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 Needham Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Needham Aggressive.
Diversification Opportunities for Federated Mdt and Needham Aggressive
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Needham is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Balanced and Needham Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Needham Aggressive Growth 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 Needham Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Needham Aggressive Growth has no effect on the direction of Federated Mdt i.e., Federated Mdt and Needham Aggressive go up and down completely randomly.
Pair Corralation between Federated Mdt and Needham Aggressive
Assuming the 90 days horizon Federated Mdt Balanced is expected to generate 0.35 times more return on investment than Needham Aggressive. However, Federated Mdt Balanced is 2.82 times less risky than Needham Aggressive. It trades about 0.16 of its potential returns per unit of risk. Needham Aggressive Growth is currently generating about 0.01 per unit of risk. If you would invest 2,174 in Federated Mdt Balanced on September 1, 2024 and sell it today you would earn a total of 250.00 from holding Federated Mdt Balanced or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mdt Balanced vs. Needham Aggressive Growth
Performance |
| Timeline |
| Federated Mdt Balanced |
| Needham Aggressive Growth |
Federated Mdt and Needham Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Needham Aggressive
The main advantage of trading using opposite Federated Mdt and Needham Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Needham Aggressive 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 Needham Aggressive will offset losses from the drop in Needham Aggressive's long position.| Federated Mdt vs. Pace International Emerging | Federated Mdt vs. Goldman Sachs Emerging | Federated Mdt vs. Franklin Emerging Market | Federated Mdt vs. Eagle Mlp Strategy |
| Needham Aggressive vs. Needham Aggressive Growth | Needham Aggressive vs. Needham Small Cap | Needham Aggressive vs. Ultramid Cap Profund Ultramid Cap | Needham Aggressive vs. Fidelity Advisor Semiconductors |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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