Correlation Between Nasdaq 100 and Federated Short
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Federated Short 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 Nasdaq 100 and Federated Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Federated Short Intermediate Total, you can compare the effects of market volatilities on Nasdaq 100 and Federated Short 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 Nasdaq 100 with a short position of Federated Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Federated Short.
Diversification Opportunities for Nasdaq 100 and Federated Short
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nasdaq and Federated is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Federated Short Intermediate T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Short Inte and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Federated Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Short Inte has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Federated Short go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Federated Short
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 5.95 times more return on investment than Federated Short. However, Nasdaq 100 is 5.95 times more volatile than Federated Short Intermediate Total. It trades about 0.33 of its potential returns per unit of risk. Federated Short Intermediate Total is currently generating about 0.02 per unit of risk. If you would invest 4,821 in Nasdaq 100 Index Fund on April 30, 2025 and sell it today you would earn a total of 920.00 from holding Nasdaq 100 Index Fund or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Federated Short Intermediate T
Performance |
| Timeline |
| Nasdaq 100 Index |
| Federated Short Inte |
Nasdaq 100 and Federated Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Federated Short
The main advantage of trading using opposite Nasdaq 100 and Federated Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Federated Short 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 Short will offset losses from the drop in Federated Short's long position.| Nasdaq 100 vs. First American Funds | Nasdaq 100 vs. Legg Mason Partners | Nasdaq 100 vs. Short Term Government Fund | Nasdaq 100 vs. Aig Government Money |
| Federated Short vs. Voya Government Money | Federated Short vs. Prudential Government Money | Federated Short vs. Davis Government Bond | Federated Short vs. Us Government Securities |
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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