Correlation Between Federated Prudent and Federated Short
Can any of the company-specific risk be diversified away by investing in both Federated Prudent and Federated Short 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 Prudent and Federated Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Prudent Bear and Federated Short Intermediate Total, you can compare the effects of market volatilities on Federated Prudent and Federated Short 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 Prudent with a short position of Federated Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Prudent and Federated Short.
Diversification Opportunities for Federated Prudent and Federated Short
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Federated is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear and Federated Short Intermediate T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Inte and Federated Prudent 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 Prudent Bear are associated (or correlated) with Federated Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Inte has no effect on the direction of Federated Prudent i.e., Federated Prudent and Federated Short go up and down completely randomly.
Pair Corralation between Federated Prudent and Federated Short
Assuming the 90 days horizon Federated Prudent Bear is expected to under-perform the Federated Short. In addition to that, Federated Prudent is 7.23 times more volatile than Federated Short Intermediate Total. It trades about -0.03 of its total potential returns per unit of risk. Federated Short Intermediate Total is currently generating about 0.11 per unit of volatility. If you would invest 976.00 in Federated Short Intermediate Total on May 27, 2025 and sell it today you would earn a total of 43.00 from holding Federated Short Intermediate Total or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Prudent Bear vs. Federated Short Intermediate T
Performance |
| Timeline |
| Federated Prudent Bear |
| Federated Short Inte |
Federated Prudent and Federated Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Prudent and Federated Short
The main advantage of trading using opposite Federated Prudent and Federated Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Prudent position performs unexpectedly, Federated Short 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 Short will offset losses from the drop in Federated Short's long position.| Federated Prudent vs. Harbor Vertible Securities | Federated Prudent vs. Virtus Convertible | Federated Prudent vs. Gabelli Convertible And | Federated Prudent vs. Rationalpier 88 Convertible |
| Federated Short vs. Federated Hermes Mdt | Federated Short vs. Federated Mdt Large | Federated Short vs. Federated High Income | Federated Short vs. Federated Hermes Intermediate |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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