Correlation Between Super Micro and Federated Government
Can any of the company-specific risk be diversified away by investing in both Super Micro and Federated Government 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 Super Micro and Federated Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Super Micro Computer and Federated Government Ultrashort, you can compare the effects of market volatilities on Super Micro and Federated Government 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 Super Micro with a short position of Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Micro and Federated Government.
Diversification Opportunities for Super Micro and Federated Government
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Super and Federated is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Super Micro Computer and Federated Government Ultrashor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government and Super Micro 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 Super Micro Computer are associated (or correlated) with Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Super Micro i.e., Super Micro and Federated Government go up and down completely randomly.
Pair Corralation between Super Micro and Federated Government
Given the investment horizon of 90 days Super Micro Computer is expected to generate 53.14 times more return on investment than Federated Government. However, Super Micro is 53.14 times more volatile than Federated Government Ultrashort. It trades about 0.01 of its potential returns per unit of risk. Federated Government Ultrashort is currently generating about 0.2 per unit of risk. If you would invest 4,319 in Super Micro Computer on June 3, 2025 and sell it today you would lose (165.00) from holding Super Micro Computer or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Super Micro Computer vs. Federated Government Ultrashor
Performance |
| Timeline |
| Super Micro Computer |
| Federated Government |
Super Micro and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Super Micro and Federated Government
The main advantage of trading using opposite Super Micro and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Super Micro position performs unexpectedly, Federated Government 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 Government will offset losses from the drop in Federated Government's long position.| Super Micro vs. IONQ Inc | Super Micro vs. Arista Networks | Super Micro vs. Cricut Inc | Super Micro vs. D Wave Quantum |
| Federated Government vs. Federated Emerging Market | Federated Government vs. Federated Mdt All | Federated Government vs. Federated Mdt Balanced | Federated Government vs. Federated Global Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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