Correlation Between Federated Strategic and Materials Portfolio
Can any of the company-specific risk be diversified away by investing in both Federated Strategic and Materials Portfolio 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 Strategic and Materials Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Strategic Income and Materials Portfolio Fidelity, you can compare the effects of market volatilities on Federated Strategic and Materials Portfolio 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 Strategic with a short position of Materials Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Strategic and Materials Portfolio.
Diversification Opportunities for Federated Strategic and Materials Portfolio
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Federated and Materials is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Federated Strategic Income and Materials Portfolio Fidelity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Portfolio and Federated Strategic 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 Strategic Income are associated (or correlated) with Materials Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Portfolio has no effect on the direction of Federated Strategic i.e., Federated Strategic and Materials Portfolio go up and down completely randomly.
Pair Corralation between Federated Strategic and Materials Portfolio
Assuming the 90 days horizon Federated Strategic is expected to generate 1.09 times less return on investment than Materials Portfolio. But when comparing it to its historical volatility, Federated Strategic Income is 3.3 times less risky than Materials Portfolio. It trades about 0.08 of its potential returns per unit of risk. Materials Portfolio Fidelity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 9,088 in Materials Portfolio Fidelity on September 4, 2024 and sell it today you would earn a total of 1,145 from holding Materials Portfolio Fidelity or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Strategic Income vs. Materials Portfolio Fidelity
Performance |
| Timeline |
| Federated Strategic |
| Materials Portfolio |
Federated Strategic and Materials Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Strategic and Materials Portfolio
The main advantage of trading using opposite Federated Strategic and Materials Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Strategic position performs unexpectedly, Materials Portfolio 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 Materials Portfolio will offset losses from the drop in Materials Portfolio's long position.| Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
| Materials Portfolio vs. Fundvantage Trust | Materials Portfolio vs. Artisan Emerging Markets | Materials Portfolio vs. Morgan Stanley Emerging | Materials Portfolio vs. Calamos Market Neutral |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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