Correlation Between Federated Clover and Alpine High
Can any of the company-specific risk be diversified away by investing in both Federated Clover and Alpine High 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 Alpine High 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 Alpine High Yield, you can compare the effects of market volatilities on Federated Clover and Alpine High 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 Alpine High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Clover and Alpine High.
Diversification Opportunities for Federated Clover and Alpine High
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Alpine is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Federated Clover Small and Alpine High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine High Yield 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 Alpine High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine High Yield has no effect on the direction of Federated Clover i.e., Federated Clover and Alpine High go up and down completely randomly.
Pair Corralation between Federated Clover and Alpine High
Assuming the 90 days horizon Federated Clover Small is expected to generate 7.47 times more return on investment than Alpine High. However, Federated Clover is 7.47 times more volatile than Alpine High Yield. It trades about 0.13 of its potential returns per unit of risk. Alpine High Yield is currently generating about 0.11 per unit of risk. If you would invest 2,525 in Federated Clover Small on September 12, 2024 and sell it today you would earn a total of 242.00 from holding Federated Clover Small or generate 9.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Clover Small vs. Alpine High Yield
Performance |
| Timeline |
| Federated Clover Small |
| Alpine High Yield |
Federated Clover and Alpine High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Clover and Alpine High
The main advantage of trading using opposite Federated Clover and Alpine High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Clover position performs unexpectedly, Alpine High 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 Alpine High will offset losses from the drop in Alpine High's long position.| Federated Clover vs. Blackrock Financial Institutions | Federated Clover vs. Transamerica Financial Life | Federated Clover vs. Royce Global Financial | Federated Clover vs. 1919 Financial Services |
| Alpine High vs. Nuveen High Yield | Alpine High vs. Nuveen High Yield | Alpine High vs. SCOR PK | Alpine High vs. Morningstar Unconstrained 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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