Correlation Between Federated Total and Federated Intermediate
Can any of the company-specific risk be diversified away by investing in both Federated Total and Federated Intermediate 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 Total and Federated Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Total Return and Federated Intermediate Porate, you can compare the effects of market volatilities on Federated Total and Federated Intermediate 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 Total with a short position of Federated Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Total and Federated Intermediate.
Diversification Opportunities for Federated Total and Federated Intermediate
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Federated and Federated is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Federated Total Return and Federated Intermediate Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Intermediate and Federated Total 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 Total Return are associated (or correlated) with Federated Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Intermediate has no effect on the direction of Federated Total i.e., Federated Total and Federated Intermediate go up and down completely randomly.
Pair Corralation between Federated Total and Federated Intermediate
Assuming the 90 days horizon Federated Total Return is expected to generate 1.35 times more return on investment than Federated Intermediate. However, Federated Total is 1.35 times more volatile than Federated Intermediate Porate. It trades about 0.17 of its potential returns per unit of risk. Federated Intermediate Porate is currently generating about 0.19 per unit of risk. If you would invest 924.00 in Federated Total Return on May 28, 2025 and sell it today you would earn a total of 28.00 from holding Federated Total Return or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Total Return vs. Federated Intermediate Porate
Performance |
| Timeline |
| Federated Total Return |
| Federated Intermediate |
Federated Total and Federated Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Total and Federated Intermediate
The main advantage of trading using opposite Federated Total and Federated Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Total position performs unexpectedly, Federated Intermediate 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 Intermediate will offset losses from the drop in Federated Intermediate's long position.| Federated Total vs. Nuveen Short Term | Federated Total vs. Calvert Short Duration | Federated Total vs. Lord Abbett Short | Federated Total vs. Leader Short Term Bond |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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