Correlation Between Federated Strategic and Federated Mortgage
Can any of the company-specific risk be diversified away by investing in both Federated Strategic and Federated Mortgage 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 Federated Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Strategic Value and Federated Mortgage Fund, you can compare the effects of market volatilities on Federated Strategic and Federated Mortgage 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 Federated Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Strategic and Federated Mortgage.
Diversification Opportunities for Federated Strategic and Federated Mortgage
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Federated is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Federated Strategic Value and Federated Mortgage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mortgage 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 Value are associated (or correlated) with Federated Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mortgage has no effect on the direction of Federated Strategic i.e., Federated Strategic and Federated Mortgage go up and down completely randomly.
Pair Corralation between Federated Strategic and Federated Mortgage
Assuming the 90 days horizon Federated Strategic Value is expected to under-perform the Federated Mortgage. In addition to that, Federated Strategic is 2.5 times more volatile than Federated Mortgage Fund. It trades about -0.28 of its total potential returns per unit of risk. Federated Mortgage Fund is currently generating about 0.14 per unit of volatility. If you would invest 819.00 in Federated Mortgage Fund on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Federated Mortgage Fund or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Strategic Value vs. Federated Mortgage Fund
Performance |
| Timeline |
| Federated Strategic Value |
| Federated Mortgage |
Federated Strategic and Federated Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Strategic and Federated Mortgage
The main advantage of trading using opposite Federated Strategic and Federated Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Strategic position performs unexpectedly, Federated Mortgage 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 Mortgage will offset losses from the drop in Federated Mortgage's long position.| Federated Strategic vs. Ab Select Equity | Federated Strategic vs. Ab Fixed Income Shares | Federated Strategic vs. Qs Global Equity | Federated Strategic vs. Rbc Global Equity |
| Federated Mortgage vs. Nuveen Real Estate | Federated Mortgage vs. Franklin Real Estate | Federated Mortgage vs. Guggenheim Risk Managed | Federated Mortgage vs. Dunham Real Estate |
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 CEOs Directory module to screen CEOs from public companies around the world.
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