Correlation Between Scharf Global and Federated Global
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Federated Global 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 Scharf Global and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Federated Global Allocation, you can compare the effects of market volatilities on Scharf Global and Federated Global 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 Scharf Global with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Federated Global.
Diversification Opportunities for Scharf Global and Federated Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and FEDERATED is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Scharf Global i.e., Scharf Global and Federated Global go up and down completely randomly.
Pair Corralation between Scharf Global and Federated Global
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 1.31 times more return on investment than Federated Global. However, Scharf Global is 1.31 times more volatile than Federated Global Allocation. It trades about 0.12 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.12 per unit of risk. If you would invest 3,665 in Scharf Global Opportunity on September 2, 2024 and sell it today you would earn a total of 164.00 from holding Scharf Global Opportunity or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Federated Global Allocation
Performance |
| Timeline |
| Scharf Global Opportunity |
| Federated Global All |
Scharf Global and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Federated Global
The main advantage of trading using opposite Scharf Global and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Federated Global 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 Global will offset losses from the drop in Federated Global's long position.| Scharf Global vs. Scharf Balanced Opportunity | Scharf Global vs. Scharf Fund Retail | Scharf Global vs. Scharf Balanced Opportunity | Scharf Global vs. Virtus Allianzgi Artificial |
| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Fund For | Federated Global vs. Aquagold International | Federated Global vs. Thrivent High Yield |
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.
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