Correlation Between Sp Midcap and Federated Total
Can any of the company-specific risk be diversified away by investing in both Sp Midcap and Federated Total 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 Sp Midcap and Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Federated Total Return, you can compare the effects of market volatilities on Sp Midcap and Federated Total 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 Sp Midcap with a short position of Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Federated Total.
Diversification Opportunities for Sp Midcap and Federated Total
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPMIX and Federated is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return and Sp Midcap 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 Sp Midcap Index are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Sp Midcap i.e., Sp Midcap and Federated Total go up and down completely randomly.
Pair Corralation between Sp Midcap and Federated Total
Assuming the 90 days horizon Sp Midcap Index is expected to under-perform the Federated Total. In addition to that, Sp Midcap is 8.04 times more volatile than Federated Total Return. It trades about -0.18 of its total potential returns per unit of risk. Federated Total Return is currently generating about 0.17 per unit of volatility. If you would invest 935.00 in Federated Total Return on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Federated Total Return or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Federated Total Return
Performance |
| Timeline |
| Sp Midcap Index |
| Federated Total Return |
Sp Midcap and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Federated Total
The main advantage of trading using opposite Sp Midcap and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Sp Midcap vs. Shelton Emerging Markets | Sp Midcap vs. Shelton Emerging Markets | Sp Midcap vs. Shelton Funds | Sp Midcap vs. Nasdaq 100 Index Fund |
| Federated Total vs. Artisan Select Equity | Federated Total vs. Gmo Global Equity | Federated Total vs. Ms Global Fixed | Federated Total vs. Huber Capital Equity |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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