Correlation Between Mid Cap and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Mid Cap and Federated Kaufmann 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 Mid Cap and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid Cap Growth and Federated Kaufmann Small, you can compare the effects of market volatilities on Mid Cap and Federated Kaufmann 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 Mid Cap with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Federated Kaufmann.
Diversification Opportunities for Mid Cap and Federated Kaufmann
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mid and Federated is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap Growth and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small and Mid Cap 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 Mid Cap Growth are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Mid Cap i.e., Mid Cap and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Mid Cap and Federated Kaufmann
Assuming the 90 days horizon Mid Cap Growth is expected to generate 1.15 times more return on investment than Federated Kaufmann. However, Mid Cap is 1.15 times more volatile than Federated Kaufmann Small. It trades about 0.18 of its potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.17 per unit of risk. If you would invest 4,287 in Mid Cap Growth on October 25, 2024 and sell it today you would earn a total of 156.00 from holding Mid Cap Growth or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mid Cap Growth vs. Federated Kaufmann Small
Performance |
| Timeline |
| Mid Cap Growth |
| Federated Kaufmann Small |
Mid Cap and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid Cap and Federated Kaufmann
The main advantage of trading using opposite Mid Cap and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid Cap position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Mid Cap vs. Touchstone Mid Cap | Mid Cap vs. Federated Mdt Small | Mid Cap vs. Harding Loevner International | Mid Cap vs. Sterling Capital Equity |
| Federated Kaufmann vs. Flakqx | Federated Kaufmann vs. Fzsvmx | Federated Kaufmann vs. Fznopx | Federated Kaufmann vs. Fwnhtx |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |