Correlation Between Wabmsx and Federated Government
Can any of the company-specific risk be diversified away by investing in both Wabmsx 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 Wabmsx and Federated Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wabmsx and Federated Government Income, you can compare the effects of market volatilities on Wabmsx 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 Wabmsx with a short position of Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wabmsx and Federated Government.
Diversification Opportunities for Wabmsx and Federated Government
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wabmsx and Federated is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Wabmsx and Federated Government Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government 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 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 Wabmsx i.e., Wabmsx and Federated Government go up and down completely randomly.
Pair Corralation between Wabmsx and Federated Government
Assuming the 90 days trading horizon Wabmsx is expected to generate 1.8 times more return on investment than Federated Government. However, Wabmsx is 1.8 times more volatile than Federated Government Income. It trades about 0.18 of its potential returns per unit of risk. Federated Government Income is currently generating about 0.16 per unit of risk. If you would invest 1,666 in Wabmsx on June 3, 2025 and sell it today you would earn a total of 105.00 from holding Wabmsx or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wabmsx vs. Federated Government Income
Performance |
| Timeline |
| Wabmsx |
| Federated Government |
Wabmsx and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wabmsx and Federated Government
The main advantage of trading using opposite Wabmsx and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wabmsx 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.| Wabmsx vs. Great West Inflation Protected Securities | Wabmsx vs. T Rowe Price | Wabmsx vs. Ab Municipal Bond | Wabmsx vs. Inflation Adjusted Bond Fund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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