Correlation Between Europacific Growth and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Federated Kaufmann 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 Europacific Growth and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Federated Kaufmann Large, you can compare the effects of market volatilities on Europacific Growth and Federated Kaufmann 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 Europacific Growth with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Federated Kaufmann.
Diversification Opportunities for Europacific Growth and Federated Kaufmann
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Europacific and Federated is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Europacific Growth i.e., Europacific Growth and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Europacific Growth and Federated Kaufmann
Assuming the 90 days horizon Europacific Growth is expected to generate 1.82 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Europacific Growth Fund is 1.74 times less risky than Federated Kaufmann. It trades about 0.04 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,990 in Federated Kaufmann Large on August 31, 2024 and sell it today you would earn a total of 528.00 from holding Federated Kaufmann Large or generate 26.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Federated Kaufmann Large
Performance |
| Timeline |
| Europacific Growth |
| Federated Kaufmann Large |
Europacific Growth and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Federated Kaufmann
The main advantage of trading using opposite Europacific Growth and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Europacific Growth vs. Growth Fund Of | Europacific Growth vs. Vanguard Institutional Index | Europacific Growth vs. Vanguard Mid Cap Index | Europacific Growth vs. Washington Mutual Investors |
| Federated Kaufmann vs. Europacific Growth Fund | Federated Kaufmann vs. Washington Mutual Investors | Federated Kaufmann vs. Capital World Growth | Federated Kaufmann vs. HUMANA INC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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