Correlation Between Federated Mdt and Causeway International
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Causeway International 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 Causeway International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mdt Small and Causeway International Value, you can compare the effects of market volatilities on Federated Mdt and Causeway International 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 Causeway International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Causeway International.
Diversification Opportunities for Federated Mdt and Causeway International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Federated and Causeway is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Small and Causeway International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway International 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 Small are associated (or correlated) with Causeway International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway International has no effect on the direction of Federated Mdt i.e., Federated Mdt and Causeway International go up and down completely randomly.
Pair Corralation between Federated Mdt and Causeway International
Assuming the 90 days horizon Federated Mdt Small is expected to generate 1.45 times more return on investment than Causeway International. However, Federated Mdt is 1.45 times more volatile than Causeway International Value. It trades about 0.22 of its potential returns per unit of risk. Causeway International Value is currently generating about 0.13 per unit of risk. If you would invest 2,685 in Federated Mdt Small on May 31, 2025 and sell it today you would earn a total of 454.00 from holding Federated Mdt Small or generate 16.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mdt Small vs. Causeway International Value
Performance |
| Timeline |
| Federated Mdt Small |
| Causeway International |
Federated Mdt and Causeway International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Causeway International
The main advantage of trading using opposite Federated Mdt and Causeway International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Causeway International 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 Causeway International will offset losses from the drop in Causeway International's long position.| Federated Mdt vs. Touchstone Mid Cap | Federated Mdt vs. Virtus Kar Small Cap | Federated Mdt vs. Mid Cap Growth | Federated Mdt vs. Harding Loevner International |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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