Correlation Between Aggressive Balanced and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Aggressive Balanced 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 Aggressive Balanced and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Balanced Allocation and Federated Strategic Income, you can compare the effects of market volatilities on Aggressive Balanced 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 Aggressive Balanced with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Balanced and Federated Strategic.
Diversification Opportunities for Aggressive Balanced and Federated Strategic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aggressive and Federated is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Balanced Allocation and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Aggressive Balanced 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 Aggressive Balanced Allocation 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 has no effect on the direction of Aggressive Balanced i.e., Aggressive Balanced and Federated Strategic go up and down completely randomly.
Pair Corralation between Aggressive Balanced and Federated Strategic
Assuming the 90 days horizon Aggressive Balanced Allocation is expected to generate 2.97 times more return on investment than Federated Strategic. However, Aggressive Balanced is 2.97 times more volatile than Federated Strategic Income. It trades about 0.23 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.32 per unit of risk. If you would invest 1,203 in Aggressive Balanced Allocation on May 30, 2025 and sell it today you would earn a total of 84.00 from holding Aggressive Balanced Allocation or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Balanced Allocation vs. Federated Strategic Income
Performance |
| Timeline |
| Aggressive Balanced |
| Federated Strategic |
Aggressive Balanced and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Balanced and Federated Strategic
The main advantage of trading using opposite Aggressive Balanced and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Balanced 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.| Aggressive Balanced vs. Salient Alternative Beta | Aggressive Balanced vs. Salient Alternative Beta | Aggressive Balanced vs. Moderately Aggressive Balanced | Aggressive Balanced vs. Salient Mlp Fund |
| Federated Strategic vs. Touchstone International Equity | Federated Strategic vs. T Rowe Price | Federated Strategic vs. Gmo Global Equity | Federated Strategic vs. Balanced Fund Retail |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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