Correlation Between Iaadx and Federated Total
Can any of the company-specific risk be diversified away by investing in both Iaadx and Federated Total 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 Iaadx and Federated Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iaadx and Federated Total Return, you can compare the effects of market volatilities on Iaadx and Federated Total 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 Iaadx with a short position of Federated Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iaadx and Federated Total.
Diversification Opportunities for Iaadx and Federated Total
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Iaadx and Federated is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Iaadx and Federated Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Total Return and Iaadx 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 Iaadx are associated (or correlated) with Federated Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Total Return has no effect on the direction of Iaadx i.e., Iaadx and Federated Total go up and down completely randomly.
Pair Corralation between Iaadx and Federated Total
Assuming the 90 days horizon Iaadx is expected to generate 0.67 times more return on investment than Federated Total. However, Iaadx is 1.49 times less risky than Federated Total. It trades about 0.37 of its potential returns per unit of risk. Federated Total Return is currently generating about 0.18 per unit of risk. If you would invest 916.00 in Iaadx on June 11, 2025 and sell it today you would earn a total of 40.00 from holding Iaadx or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iaadx vs. Federated Total Return
Performance |
| Timeline |
| Iaadx |
| Federated Total Return |
Iaadx and Federated Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iaadx and Federated Total
The main advantage of trading using opposite Iaadx and Federated Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iaadx position performs unexpectedly, Federated Total 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 Total will offset losses from the drop in Federated Total's long position.| Iaadx vs. Transamerica Emerging Markets | Iaadx vs. Transamerica Emerging Markets | Iaadx vs. Transamerica Emerging Markets | Iaadx vs. Transamerica Capital Growth |
| Federated Total vs. Dreyfus Short Intermediate | Federated Total vs. Angel Oak Ultrashort | Federated Total vs. John Hancock Municipal | Federated Total vs. American Funds Tax Exempt |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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