Correlation Between Federated Strategic and Delaware Limited-term
Can any of the company-specific risk be diversified away by investing in both Federated Strategic and Delaware Limited-term 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 Delaware Limited-term 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 Delaware Limited Term Diversified, you can compare the effects of market volatilities on Federated Strategic and Delaware Limited-term 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 Delaware Limited-term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Strategic and Delaware Limited-term.
Diversification Opportunities for Federated Strategic and Delaware Limited-term
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Delaware is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Federated Strategic Value and Delaware Limited Term Diversif in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Limited Term 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 Delaware Limited-term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Limited Term has no effect on the direction of Federated Strategic i.e., Federated Strategic and Delaware Limited-term go up and down completely randomly.
Pair Corralation between Federated Strategic and Delaware Limited-term
Assuming the 90 days horizon Federated Strategic Value is expected to generate 4.66 times more return on investment than Delaware Limited-term. However, Federated Strategic is 4.66 times more volatile than Delaware Limited Term Diversified. It trades about 0.2 of its potential returns per unit of risk. Delaware Limited Term Diversified is currently generating about 0.06 per unit of risk. If you would invest 626.00 in Federated Strategic Value on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Federated Strategic Value or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Federated Strategic Value vs. Delaware Limited Term Diversif
Performance |
| Timeline |
| Federated Strategic Value |
| Delaware Limited Term |
Federated Strategic and Delaware Limited-term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Strategic and Delaware Limited-term
The main advantage of trading using opposite Federated Strategic and Delaware Limited-term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Strategic position performs unexpectedly, Delaware Limited-term 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 Delaware Limited-term will offset losses from the drop in Delaware Limited-term'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 |
| Delaware Limited-term vs. T Rowe Price | Delaware Limited-term vs. The National Tax Free | Delaware Limited-term vs. Ishares Municipal Bond | Delaware Limited-term vs. Old Westbury Municipal |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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