Correlation Between Transamerica Intermediate and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Transamerica Intermediate 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 Transamerica Intermediate and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Intermediate Muni and Federated Kaufmann Fund, you can compare the effects of market volatilities on Transamerica Intermediate 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 Transamerica Intermediate with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and Federated Kaufmann.
Diversification Opportunities for Transamerica Intermediate and Federated Kaufmann
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transamerica and Federated is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni and Federated Kaufmann Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann and Transamerica Intermediate 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 Transamerica Intermediate Muni 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 has no effect on the direction of Transamerica Intermediate i.e., Transamerica Intermediate and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Transamerica Intermediate and Federated Kaufmann
Assuming the 90 days horizon Transamerica Intermediate Muni is expected to generate 0.15 times more return on investment than Federated Kaufmann. However, Transamerica Intermediate Muni is 6.76 times less risky than Federated Kaufmann. It trades about 0.09 of its potential returns per unit of risk. Federated Kaufmann Fund is currently generating about -0.06 per unit of risk. If you would invest 1,079 in Transamerica Intermediate Muni on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Transamerica Intermediate Muni or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Intermediate Muni vs. Federated Kaufmann Fund
Performance |
| Timeline |
| Transamerica Intermediate |
| Federated Kaufmann |
Transamerica Intermediate and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Intermediate and Federated Kaufmann
The main advantage of trading using opposite Transamerica Intermediate and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Intermediate 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.| Transamerica Intermediate vs. Champlain Mid Cap | Transamerica Intermediate vs. Praxis Growth Index | Transamerica Intermediate vs. Artisan Small Cap | Transamerica Intermediate vs. Chase Growth Fund |
| Federated Kaufmann vs. Federated Emerging Market | Federated Kaufmann vs. Federated Mdt All | Federated Kaufmann vs. Federated Mdt Balanced | Federated Kaufmann vs. Federated Global Allocation |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |