Correlation Between Profunds-large Cap and Federated
Can any of the company-specific risk be diversified away by investing in both Profunds-large Cap and Federated 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 Profunds-large Cap and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Large Cap Growth and Federated U S, you can compare the effects of market volatilities on Profunds-large Cap and Federated 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 Profunds-large Cap with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds-large Cap and Federated.
Diversification Opportunities for Profunds-large Cap and Federated
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Profunds-large and Federated is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S and Profunds-large 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 Profunds Large Cap Growth are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Profunds-large Cap i.e., Profunds-large Cap and Federated go up and down completely randomly.
Pair Corralation between Profunds-large Cap and Federated
Assuming the 90 days horizon Profunds Large Cap Growth is expected to generate 8.12 times more return on investment than Federated. However, Profunds-large Cap is 8.12 times more volatile than Federated U S. It trades about 0.22 of its potential returns per unit of risk. Federated U S is currently generating about -0.01 per unit of risk. If you would invest 2,884 in Profunds Large Cap Growth on April 4, 2025 and sell it today you would earn a total of 845.00 from holding Profunds Large Cap Growth or generate 29.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Federated U S
Performance |
| Timeline |
| Profunds Large Cap |
| Federated U S |
Profunds-large Cap and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds-large Cap and Federated
The main advantage of trading using opposite Profunds-large Cap and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds-large Cap position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Profunds-large Cap vs. Guggenheim High Yield | Profunds-large Cap vs. Neuberger Berman Income | Profunds-large Cap vs. Buffalo High Yield | Profunds-large Cap vs. Blackrock High Yield |
| Federated vs. Growth Allocation Fund | Federated vs. Nuveen Winslow Large Cap | Federated vs. Profunds Large Cap Growth | Federated vs. Guidemark Large Cap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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