Correlation Between Omni Small-cap and Federated
Can any of the company-specific risk be diversified away by investing in both Omni Small-cap 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 Omni Small-cap and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omni Small Cap Value and Federated U S, you can compare the effects of market volatilities on Omni Small-cap 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 Omni Small-cap with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omni Small-cap and Federated.
Diversification Opportunities for Omni Small-cap and Federated
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Omni and Federated is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Omni Small Cap Value 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 Omni Small-cap 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 Omni Small Cap Value 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 Omni Small-cap i.e., Omni Small-cap and Federated go up and down completely randomly.
Pair Corralation between Omni Small-cap and Federated
Assuming the 90 days horizon Omni Small Cap Value is expected to generate 6.9 times more return on investment than Federated. However, Omni Small-cap is 6.9 times more volatile than Federated U S. It trades about 0.17 of its potential returns per unit of risk. Federated U S is currently generating about 0.19 per unit of risk. If you would invest 1,683 in Omni Small Cap Value on June 9, 2025 and sell it today you would earn a total of 243.00 from holding Omni Small Cap Value or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omni Small Cap Value vs. Federated U S
Performance |
| Timeline |
| Omni Small Cap |
| Federated U S |
Omni Small-cap and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omni Small-cap and Federated
The main advantage of trading using opposite Omni Small-cap and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omni Small-cap 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.| Omni Small-cap vs. Aggressive Investors 1 | Omni Small-cap vs. Bridgeway Global Opportunities | Omni Small-cap vs. Ultra Small Pany Market | Omni Small-cap vs. Small Cap Value Fund |
| Federated vs. Ms Global Fixed | Federated vs. Harris Associates Investment | Federated vs. Bbh Intermediate Municipal | Federated vs. Artisan High Income |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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