Correlation Between Federated Investors and P10

Can any of the company-specific risk be diversified away by investing in both Federated Investors and P10 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 Investors and P10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Investors B and P10 Inc, you can compare the effects of market volatilities on Federated Investors and P10 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 Investors with a short position of P10. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Investors and P10.

Diversification Opportunities for Federated Investors and P10

-0.05

Correlation Coefficient

Federated Investors  P10

Good diversification

The 3 months correlation between Federated and P10 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Federated Investors B and P10 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P10 Inc and Federated Investors 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 Investors B are associated (or correlated) with P10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P10 Inc has no effect on the direction of Federated Investors i.e., Federated Investors and P10 go up and down completely randomly.

Pair Corralation between Federated Investors and P10

Considering the 90-day investment horizon Federated Investors B is expected to generate 0.61 times more return on investment than P10. However, Federated Investors B is 1.63 times less risky than P10. It trades about 0.01 of its potential returns per unit of risk. P10 Inc is currently generating about -0.01 per unit of risk. If you would invest  4,109  in Federated Investors B on December 27, 2024 and sell it today you would earn a total of  12.00  from holding Federated Investors B or generate 0.29% return on investment over 90 days.

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

Federated Investors B  vs.  P10 Inc

Federated Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federated Investors B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Federated Investors is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

P10 Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days P10 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, P10 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Federated Investors and P10

The main advantage of trading using opposite Federated Investors and P10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Investors position performs unexpectedly, P10 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 P10 will offset losses from the drop in P10's long position.

The idea behind Federated Investors B and P10 Inc 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.