Correlation Between Growth Strategy and Federated Global
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Federated Global 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 Growth Strategy and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Federated Global Total, you can compare the effects of market volatilities on Growth Strategy and Federated Global 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 Growth Strategy with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Federated Global.
Diversification Opportunities for Growth Strategy and Federated Global
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GROWTH and Federated is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Federated Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global Total and Growth Strategy 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 Growth Strategy Fund are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global Total has no effect on the direction of Growth Strategy i.e., Growth Strategy and Federated Global go up and down completely randomly.
Pair Corralation between Growth Strategy and Federated Global
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 1.51 times more return on investment than Federated Global. However, Growth Strategy is 1.51 times more volatile than Federated Global Total. It trades about 0.08 of its potential returns per unit of risk. Federated Global Total is currently generating about 0.01 per unit of risk. If you would invest 1,037 in Growth Strategy Fund on September 2, 2024 and sell it today you would earn a total of 307.00 from holding Growth Strategy Fund or generate 29.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Federated Global Total
Performance |
| Timeline |
| Growth Strategy |
| Federated Global Total |
Growth Strategy and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Federated Global
The main advantage of trading using opposite Growth Strategy and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Federated Global 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 Global will offset losses from the drop in Federated Global's long position.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
| Federated Global vs. Federated Emerging Market | Federated Global vs. Federated Mdt All | Federated Global vs. Federated Mdt Balanced | Federated Global vs. Federated Global Allocation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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