Correlation Between Federated Mdt and Federated Intermediate
Can any of the company-specific risk be diversified away by investing in both Federated Mdt 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 Mdt 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 Mdt Large and Federated Intermediate Municipal, you can compare the effects of market volatilities on Federated Mdt 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 Mdt with a short position of Federated Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Federated Intermediate.
Diversification Opportunities for Federated Mdt and Federated Intermediate
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Federated is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Federated Intermediate Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Intermediate and Federated Mdt 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 Mdt Large 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 Mdt i.e., Federated Mdt and Federated Intermediate go up and down completely randomly.
Pair Corralation between Federated Mdt and Federated Intermediate
Assuming the 90 days horizon Federated Mdt Large is expected to generate 7.73 times more return on investment than Federated Intermediate. However, Federated Mdt is 7.73 times more volatile than Federated Intermediate Municipal. It trades about 0.12 of its potential returns per unit of risk. Federated Intermediate Municipal is currently generating about 0.23 per unit of risk. If you would invest 3,484 in Federated Mdt Large on June 6, 2025 and sell it today you would earn a total of 206.00 from holding Federated Mdt Large or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Federated Mdt Large vs. Federated Intermediate Municip
Performance |
| Timeline |
| Federated Mdt Large |
| Federated Intermediate |
Federated Mdt and Federated Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Federated Intermediate
The main advantage of trading using opposite Federated Mdt and Federated Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt 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 Mdt vs. The Gold Bullion | Federated Mdt vs. Europac Gold Fund | Federated Mdt vs. First Eagle Gold | Federated Mdt vs. Great West Goldman Sachs |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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