Correlation Between Ab Global and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Ab Global and Federated Mdt 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 Ab Global and Federated Mdt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Federated Mdt Balanced, you can compare the effects of market volatilities on Ab Global and Federated Mdt 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 Ab Global with a short position of Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Federated Mdt.
Diversification Opportunities for Ab Global and Federated Mdt
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CBSYX and Federated is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Federated Mdt Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Balanced and Ab 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 Ab Global Risk are associated (or correlated) with Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Balanced has no effect on the direction of Ab Global i.e., Ab Global and Federated Mdt go up and down completely randomly.
Pair Corralation between Ab Global and Federated Mdt
Assuming the 90 days horizon Ab Global is expected to generate 1.26 times less return on investment than Federated Mdt. But when comparing it to its historical volatility, Ab Global Risk is 1.22 times less risky than Federated Mdt. It trades about 0.22 of its potential returns per unit of risk. Federated Mdt Balanced is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,206 in Federated Mdt Balanced on May 26, 2025 and sell it today you would earn a total of 132.00 from holding Federated Mdt Balanced or generate 5.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Global Risk vs. Federated Mdt Balanced
Performance |
Timeline |
Ab Global Risk |
Federated Mdt Balanced |
Ab Global and Federated Mdt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Global and Federated Mdt
The main advantage of trading using opposite Ab Global and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Federated Mdt 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 Mdt will offset losses from the drop in Federated Mdt's long position.Ab Global vs. Mfs Lifetime Retirement | Ab Global vs. Blackrock Moderate Prepared | Ab Global vs. Fidelity Managed Retirement | Ab Global vs. Sa Worldwide Moderate |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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