Correlation Between Federated Government and Dana Epiphany

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

By analyzing existing cross correlation between Federated Government Ultrashort and Dana Epiphany Esg, you can compare the effects of market volatilities on Federated Government and Dana Epiphany 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 Federated Government with a short position of Dana Epiphany. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Government and Dana Epiphany.

Diversification Opportunities for Federated Government and Dana Epiphany

-0.7

Correlation Coefficient

Federated Government  Dana Epiphany

Excellent diversification

The 3 months correlation between Federated and Dana is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Federated Government Ultrashor and Dana Epiphany Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Epiphany Esg and Federated Government 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 Federated Government Ultrashort are associated (or correlated) with Dana Epiphany. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Epiphany Esg has no effect on the direction of Federated Government i.e., Federated Government and Dana Epiphany go up and down completely randomly.

Pair Corralation between Federated Government and Dana Epiphany

Assuming the 90 days horizon Federated Government Ultrashort is expected to generate 0.08 times more return on investment than Dana Epiphany. However, Federated Government Ultrashort is 11.8 times less risky than Dana Epiphany. It trades about 0.22 of its potential returns per unit of risk. Dana Epiphany Esg is currently generating about -0.1 per unit of risk. If you would invest  965.00  in Federated Government Ultrashort on December 30, 2024 and sell it today you would earn a total of  12.00  from holding Federated Government Ultrashort or generate 1.24% return on investment over 90 days.

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

Federated Government Ultrashor  vs.  Dana Epiphany Esg

Federated Government

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Government Ultrashort are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dana Epiphany Esg

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dana Epiphany Esg has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Federated Government and Dana Epiphany

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

The idea behind Federated Government Ultrashort and Dana Epiphany Esg 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.