Correlation Between Federated Mid-cap and Federated Global
Can any of the company-specific risk be diversified away by investing in both Federated Mid-cap 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 Federated Mid-cap and Federated Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mid Cap Index and Federated Global Allocation, you can compare the effects of market volatilities on Federated Mid-cap 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 Federated Mid-cap with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mid-cap and Federated Global.
Diversification Opportunities for Federated Mid-cap and Federated Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Federated is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mid Cap Index 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 Federated Mid-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 Federated Mid Cap Index 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 Federated Mid-cap i.e., Federated Mid-cap and Federated Global go up and down completely randomly.
Pair Corralation between Federated Mid-cap and Federated Global
Assuming the 90 days horizon Federated Mid Cap Index is expected to generate 2.07 times more return on investment than Federated Global. However, Federated Mid-cap is 2.07 times more volatile than Federated Global Allocation. It trades about 0.14 of its potential returns per unit of risk. Federated Global Allocation is currently generating about 0.21 per unit of risk. If you would invest 1,511 in Federated Mid Cap Index on June 9, 2025 and sell it today you would earn a total of 121.00 from holding Federated Mid Cap Index or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mid Cap Index vs. Federated Global Allocation
Performance |
| Timeline |
| Federated Mid Cap |
| Federated Global All |
Federated Mid-cap and Federated Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mid-cap and Federated Global
The main advantage of trading using opposite Federated Mid-cap and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mid-cap 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.| Federated Mid-cap vs. Federated Mdt Large | Federated Mid-cap vs. Federated Global Allocation | Federated Mid-cap vs. Federated Max Cap Index | Federated Mid-cap vs. Federated Total Return |
| Federated Global vs. Federated Kaufmann Large | Federated Global vs. Federated Mdt Large | Federated Global vs. Federated Mid Cap Index | Federated Global vs. Federated Max Cap Index |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |