Correlation Between Federated and Federated Short-intermedia
Can any of the company-specific risk be diversified away by investing in both Federated and Federated Short-intermedia 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 and Federated Short-intermedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated U S and Federated Short Intermediate Total, you can compare the effects of market volatilities on Federated and Federated Short-intermedia 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 with a short position of Federated Short-intermedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated and Federated Short-intermedia.
Diversification Opportunities for Federated and Federated Short-intermedia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Federated and Federated is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Federated U S and Federated Short Intermediate T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short-intermedia and Federated 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 U S are associated (or correlated) with Federated Short-intermedia. 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-intermedia has no effect on the direction of Federated i.e., Federated and Federated Short-intermedia go up and down completely randomly.
Pair Corralation between Federated and Federated Short-intermedia
Assuming the 90 days horizon Federated is expected to generate 1.08 times less return on investment than Federated Short-intermedia. But when comparing it to its historical volatility, Federated U S is 1.25 times less risky than Federated Short-intermedia. It trades about 0.12 of its potential returns per unit of risk. Federated Short Intermediate Total is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 924.00 in Federated Short Intermediate Total on April 8, 2025 and sell it today you would earn a total of 89.00 from holding Federated Short Intermediate Total or generate 9.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Federated U S vs. Federated Short Intermediate T
Performance |
Timeline |
Federated U S |
Federated Short-intermedia |
Federated and Federated Short-intermedia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated and Federated Short-intermedia
The main advantage of trading using opposite Federated and Federated Short-intermedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated position performs unexpectedly, Federated Short-intermedia 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-intermedia will offset losses from the drop in Federated Short-intermedia's long position.Federated vs. Materials Portfolio Fidelity | Federated vs. Fbanjx | Federated vs. Fbjygx | Federated vs. Abs Insights Emerging |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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