Correlation Between Federated Real and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Federated Real and Federated Strategic 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 Real and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Real Return and Federated Strategic Value, you can compare the effects of market volatilities on Federated Real and Federated Strategic 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 Real with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Real and Federated Strategic.
Diversification Opportunities for Federated Real and Federated Strategic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Federated is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Federated Real Return and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value and Federated Real 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 Real Return are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Federated Real i.e., Federated Real and Federated Strategic go up and down completely randomly.
Pair Corralation between Federated Real and Federated Strategic
Assuming the 90 days horizon Federated Real is expected to generate 3.26 times less return on investment than Federated Strategic. But when comparing it to its historical volatility, Federated Real Return is 2.43 times less risky than Federated Strategic. It trades about 0.12 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 608.00 in Federated Strategic Value on May 30, 2025 and sell it today you would earn a total of 41.00 from holding Federated Strategic Value or generate 6.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Federated Real Return vs. Federated Strategic Value
Performance |
| Timeline |
| Federated Real Return |
Risk-Adjusted Performance
Fair
Weak | Strong |
| Federated Strategic Value |
Federated Real and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Real and Federated Strategic
The main advantage of trading using opposite Federated Real and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Real position performs unexpectedly, Federated Strategic 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 Strategic will offset losses from the drop in Federated Strategic's long position.| Federated Real vs. Ab High Income | Federated Real vs. Gmo High Yield | Federated Real vs. Ab High Income | Federated Real vs. Mesirow Financial High |
| Federated Strategic vs. Precious Metals And | Federated Strategic vs. International Investors Gold | Federated Strategic vs. Gold And Precious | Federated Strategic vs. Invesco Gold Special |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |