Correlation Between Federated High and Commonwealth Global
Can any of the company-specific risk be diversified away by investing in both Federated High and Commonwealth 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 Federated High and Commonwealth Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated High Yield and Commonwealth Global Fund, you can compare the effects of market volatilities on Federated High and Commonwealth 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 Federated High with a short position of Commonwealth Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated High and Commonwealth Global.
Diversification Opportunities for Federated High and Commonwealth Global
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Commonwealth is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Federated High Yield and Commonwealth Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commonwealth Global and Federated High 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 High Yield are associated (or correlated) with Commonwealth Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commonwealth Global has no effect on the direction of Federated High i.e., Federated High and Commonwealth Global go up and down completely randomly.
Pair Corralation between Federated High and Commonwealth Global
Assuming the 90 days horizon Federated High is expected to generate 2.23 times less return on investment than Commonwealth Global. But when comparing it to its historical volatility, Federated High Yield is 3.19 times less risky than Commonwealth Global. It trades about 0.35 of its potential returns per unit of risk. Commonwealth Global Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,830 in Commonwealth Global Fund on April 16, 2025 and sell it today you would earn a total of 224.00 from holding Commonwealth Global Fund or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated High Yield vs. Commonwealth Global Fund
Performance |
| Timeline |
| Federated High Yield |
| Commonwealth Global |
Federated High and Commonwealth Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated High and Commonwealth Global
The main advantage of trading using opposite Federated High and Commonwealth Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated High position performs unexpectedly, Commonwealth 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 Commonwealth Global will offset losses from the drop in Commonwealth Global's long position.| Federated High vs. Lebenthal Lisanti Small | Federated High vs. Siit Small Cap | Federated High vs. Nuveen Nwq Smallmid Cap | Federated High vs. Transamerica International Small |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |