Correlation Between Wabmsx and Federated
Can any of the company-specific risk be diversified away by investing in both Wabmsx and Federated 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 Wabmsx and Federated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabmsx and Federated U S, you can compare the effects of market volatilities on Wabmsx and Federated 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 Wabmsx with a short position of Federated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabmsx and Federated.
Diversification Opportunities for Wabmsx and Federated
Weak diversification
The 3 months correlation between Wabmsx and Federated is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wabmsx and Federated U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated U S and Wabmsx 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 Wabmsx are associated (or correlated) with Federated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated U S has no effect on the direction of Wabmsx i.e., Wabmsx and Federated go up and down completely randomly.
Pair Corralation between Wabmsx and Federated
Assuming the 90 days trading horizon Wabmsx is expected to generate 3.23 times more return on investment than Federated. However, Wabmsx is 3.23 times more volatile than Federated U S. It trades about 0.38 of its potential returns per unit of risk. Federated U S is currently generating about 0.03 per unit of risk. If you would invest 1,480 in Wabmsx on April 20, 2025 and sell it today you would earn a total of 257.00 from holding Wabmsx or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabmsx vs. Federated U S
Performance |
| Timeline |
| Wabmsx |
| Federated U S |
Wabmsx and Federated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabmsx and Federated
The main advantage of trading using opposite Wabmsx and Federated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabmsx position performs unexpectedly, Federated 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 will offset losses from the drop in Federated's long position.| Wabmsx vs. Wells Fargo Diversified | Wabmsx vs. Harbor Diversified International | Wabmsx vs. Global Diversified Income | Wabmsx vs. American Funds Conservative |
| Federated vs. Federated Emerging Market | Federated vs. Federated Mdt All | Federated vs. Federated Mdt Balanced | Federated 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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