Correlation Between Gold and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Gold and Federated Strategic 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 Gold and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold And Precious and Federated Strategic Income, you can compare the effects of market volatilities on Gold and Federated Strategic 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 Gold with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold and Federated Strategic.
Diversification Opportunities for Gold and Federated Strategic
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gold and Federated is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Gold 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 Gold And Precious are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Gold i.e., Gold and Federated Strategic go up and down completely randomly.
Pair Corralation between Gold and Federated Strategic
Assuming the 90 days horizon Gold And Precious is expected to under-perform the Federated Strategic. In addition to that, Gold is 6.95 times more volatile than Federated Strategic Income. It trades about -0.22 of its total potential returns per unit of risk. Federated Strategic Income is currently generating about 0.16 per unit of volatility. If you would invest 828.00 in Federated Strategic Income on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Federated Strategic Income or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold And Precious vs. Federated Strategic Income
Performance |
| Timeline |
| Gold And Precious |
| Federated Strategic |
Gold and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold and Federated Strategic
The main advantage of trading using opposite Gold and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold position performs unexpectedly, Federated Strategic 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 Strategic will offset losses from the drop in Federated Strategic's long position.| Gold vs. Multisector Bond Sma | Gold vs. Ambrus Core Bond | Gold vs. Transamerica Intermediate Muni | Gold vs. Blrc Sgy Mnp |
| Federated Strategic vs. Sprott Gold Equity | Federated Strategic vs. Goldman Sachs Esg | Federated Strategic vs. Europac Gold Fund | Federated Strategic vs. Gold And Precious |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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