Correlation Between Federated Total and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Federated Total and Metropolitan West 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 Total and Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Total Return and Metropolitan West Total, you can compare the effects of market volatilities on Federated Total and Metropolitan West 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 Total with a short position of Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Total and Metropolitan West.
Diversification Opportunities for Federated Total and Metropolitan West
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Federated and Metropolitan is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Total Return and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total and Federated Total 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 Total Return are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Federated Total i.e., Federated Total and Metropolitan West go up and down completely randomly.
Pair Corralation between Federated Total and Metropolitan West
Assuming the 90 days horizon Federated Total is expected to generate 1.31 times less return on investment than Metropolitan West. But when comparing it to its historical volatility, Federated Total Return is 1.36 times less risky than Metropolitan West. It trades about 0.18 of its potential returns per unit of risk. Metropolitan West Total is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Metropolitan West Total on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Metropolitan West Total or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Total Return vs. Metropolitan West Total
Performance |
| Timeline |
| Federated Total Return |
| Metropolitan West Total |
Federated Total and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Total and Metropolitan West
The main advantage of trading using opposite Federated Total and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Total position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Federated Total vs. Federated Emerging Market | Federated Total vs. Federated Mdt All | Federated Total vs. Federated Mdt Balanced | Federated Total vs. Federated Global Allocation |
| Metropolitan West vs. Loomis Sayles Bond | Metropolitan West vs. Doubleline Total Return | Metropolitan West vs. Baird E Plus | Metropolitan West vs. Harbor International Fund |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |