Correlation Between Federated Clover and Federated
Can any of the company-specific risk be diversified away by investing in both Federated Clover and Federated 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 Clover and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Clover Small and Federated U S, you can compare the effects of market volatilities on Federated Clover and Federated 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 Clover with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Clover and Federated.
Diversification Opportunities for Federated Clover and Federated
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federated and Federated is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Federated Clover Small and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S and Federated Clover 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 Clover Small are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Federated Clover i.e., Federated Clover and Federated go up and down completely randomly.
Pair Corralation between Federated Clover and Federated
Assuming the 90 days horizon Federated Clover Small is expected to generate 9.39 times more return on investment than Federated. However, Federated Clover is 9.39 times more volatile than Federated U S. It trades about 0.09 of its potential returns per unit of risk. Federated U S is currently generating about 0.13 per unit of risk. If you would invest 2,418 in Federated Clover Small on September 1, 2024 and sell it today you would earn a total of 488.00 from holding Federated Clover Small or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Federated Clover Small vs. Federated U S
Performance |
| Timeline |
| Federated Clover Small |
| Federated U S |
Federated Clover and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Clover and Federated
The main advantage of trading using opposite Federated Clover and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Clover position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Federated Clover vs. Pimco Diversified Income | Federated Clover vs. Western Asset Diversified | Federated Clover vs. Massmutual Premier Diversified | Federated Clover vs. Huber Capital Diversified |
| Federated vs. Federated Emerging Market | Federated vs. Federated Mdt All | Federated vs. Federated Mdt Balanced | Federated 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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