Correlation Between Guidemark Large and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Guidemark Large and Federated Kaufmann 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 Guidemark Large and Federated Kaufmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Federated Kaufmann Large, you can compare the effects of market volatilities on Guidemark Large and Federated Kaufmann 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 Guidemark Large with a short position of Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Federated Kaufmann.
Diversification Opportunities for Guidemark Large and Federated Kaufmann
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guidemark and Federated is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large and Guidemark Large 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 Guidemark Large Cap are associated (or correlated) with Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Guidemark Large i.e., Guidemark Large and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Guidemark Large and Federated Kaufmann
Assuming the 90 days horizon Guidemark Large is expected to generate 1.25 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Guidemark Large Cap is 1.76 times less risky than Federated Kaufmann. It trades about 0.36 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,367 in Federated Kaufmann Large on April 7, 2025 and sell it today you would earn a total of 430.00 from holding Federated Kaufmann Large or generate 31.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. Federated Kaufmann Large
Performance |
| Timeline |
| Guidemark Large Cap |
| Federated Kaufmann Large |
Guidemark Large and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and Federated Kaufmann
The main advantage of trading using opposite Guidemark Large and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large position performs unexpectedly, Federated Kaufmann 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 Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Guidemark Large vs. Guidemark E Fixed | Guidemark Large vs. Guidemark Large Cap | Guidemark Large vs. Guidemark Smallmid Cap | Guidemark Large vs. Guidemark World Ex Us |
| Federated Kaufmann vs. Prudential Real Estate | Federated Kaufmann vs. Prudential Select Real | Federated Kaufmann vs. Commonwealth Real Estate | Federated Kaufmann vs. Global Real Estate |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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