Correlation Between Federated Global and Federated Max-cap
Can any of the company-specific risk be diversified away by investing in both Federated Global and Federated Max-cap 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 Global and Federated Max-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Federated Max Cap Index, you can compare the effects of market volatilities on Federated Global and Federated Max-cap 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 Global with a short position of Federated Max-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Federated Max-cap.
Diversification Opportunities for Federated Global and Federated Max-cap
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Federated is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Federated Max Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Max Cap and Federated Global 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 Global Allocation are associated (or correlated) with Federated Max-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Max Cap has no effect on the direction of Federated Global i.e., Federated Global and Federated Max-cap go up and down completely randomly.
Pair Corralation between Federated Global and Federated Max-cap
Assuming the 90 days horizon Federated Global is expected to generate 1.87 times less return on investment than Federated Max-cap. But when comparing it to its historical volatility, Federated Global Allocation is 1.71 times less risky than Federated Max-cap. It trades about 0.14 of its potential returns per unit of risk. Federated Max Cap Index is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Federated Max Cap Index on August 30, 2024 and sell it today you would earn a total of 24.00 from holding Federated Max Cap Index or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Federated Max Cap Index
Performance |
| Timeline |
| Federated Global All |
| Federated Max Cap |
Federated Global and Federated Max-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Federated Max-cap
The main advantage of trading using opposite Federated Global and Federated Max-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Federated Max-cap 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 Max-cap will offset losses from the drop in Federated Max-cap's long position.| Federated Global vs. Capital Income Builder | Federated Global vs. Capital Income Builder | Federated Global vs. Capital Income Builder | Federated Global vs. HUMANA INC |
| Federated Max-cap vs. Gmo Small Cap | Federated Max-cap vs. The Hartford Small | Federated Max-cap vs. Tax Managed Mid Small | Federated Max-cap vs. Touchstone Small Cap |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |