Correlation Between Conquer Risk and Federated Floating

Can any of the company-specific risk be diversified away by investing in both Conquer Risk and Federated Floating 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 Conquer Risk and Federated Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Conquer Risk Managed and Federated Floating Rate, you can compare the effects of market volatilities on Conquer Risk and Federated Floating 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 Conquer Risk with a short position of Federated Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conquer Risk and Federated Floating.

Diversification Opportunities for Conquer Risk and Federated Floating

0.68

Correlation Coefficient

Conquer Risk  Federated Floating

Poor diversification

The 3 months correlation between Conquer and Federated is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Conquer Risk Managed and Federated Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Floating Rate and Conquer Risk 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 Conquer Risk Managed are associated (or correlated) with Federated Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Floating Rate has no effect on the direction of Conquer Risk i.e., Conquer Risk and Federated Floating go up and down completely randomly.

Pair Corralation between Conquer Risk and Federated Floating

Assuming the 90 days horizon Conquer Risk is expected to generate 92.5 times less return on investment than Federated Floating. In addition to that, Conquer Risk is 1.7 times more volatile than Federated Floating Rate. It trades about 0.0 of its total potential returns per unit of risk. Federated Floating Rate is currently generating about 0.16 per unit of volatility. If you would invest  855.00  in Federated Floating Rate on September 26, 2024 and sell it today you would earn a total of  10.00  from holding Federated Floating Rate or generate 1.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Conquer Risk Managed  vs.  Federated Floating Rate

Conquer Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conquer Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Conquer Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated Floating Rate

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Floating Rate are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Conquer Risk and Federated Floating

The main advantage of trading using opposite Conquer Risk and Federated Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conquer Risk position performs unexpectedly, Federated Floating 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 Floating will offset losses from the drop in Federated Floating's long position.

The idea behind Conquer Risk Managed and Federated Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.