Correlation Between Federated Mdt and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Federated Mdt and Nasdaq 100 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 Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mdt All and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Federated Mdt and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mdt and Nasdaq 100.
Diversification Opportunities for Federated Mdt and Nasdaq 100
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Federated and Nasdaq is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt All and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x 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 All are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Federated Mdt i.e., Federated Mdt and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Federated Mdt and Nasdaq 100
Assuming the 90 days horizon Federated Mdt is expected to generate 2.37 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Federated Mdt All is 2.4 times less risky than Nasdaq 100. It trades about 0.39 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 27,687 in Nasdaq 100 2x Strategy on April 22, 2025 and sell it today you would earn a total of 15,505 from holding Nasdaq 100 2x Strategy or generate 56.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Federated Mdt All vs. Nasdaq 100 2x Strategy
Performance |
| Timeline |
| Federated Mdt All |
| Nasdaq 100 2x |
Federated Mdt and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mdt and Nasdaq 100
The main advantage of trading using opposite Federated Mdt and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mdt position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Federated Mdt vs. Bts Tactical Fixed | Federated Mdt vs. Ultra Short Term Fixed | Federated Mdt vs. Ab Bond Inflation | Federated Mdt vs. Siit High Yield |
| Nasdaq 100 vs. Ab Small Cap | Nasdaq 100 vs. Praxis Small Cap | Nasdaq 100 vs. Needham Small Cap | Nasdaq 100 vs. Scout Small 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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