Correlation Between Federated Max-cap and Riskproreg; 30+

Can any of the company-specific risk be diversified away by investing in both Federated Max-cap and Riskproreg; 30+ 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 Max-cap and Riskproreg; 30+ into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Federated Max Cap Index and Riskproreg 30 Fund, you can compare the effects of market volatilities on Federated Max-cap and Riskproreg; 30+ 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 Max-cap with a short position of Riskproreg; 30+. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Max-cap and Riskproreg; 30+.

Diversification Opportunities for Federated Max-cap and Riskproreg; 30+

0.63

Correlation Coefficient

Federated Max-cap  Riskproreg; 30+

Poor diversification

The 3 months correlation between Federated and Riskproreg; is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Federated Max Cap Index and Riskproreg 30 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riskproreg; 30+ and Federated Max-cap 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 Max Cap Index are associated (or correlated) with Riskproreg; 30+. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riskproreg; 30+ has no effect on the direction of Federated Max-cap i.e., Federated Max-cap and Riskproreg; 30+ go up and down completely randomly.

Pair Corralation between Federated Max-cap and Riskproreg; 30+

Assuming the 90 days horizon Federated Max Cap Index is expected to under-perform the Riskproreg; 30+. In addition to that, Federated Max-cap is 2.28 times more volatile than Riskproreg 30 Fund. It trades about -0.24 of its total potential returns per unit of risk. Riskproreg 30 Fund is currently generating about -0.26 per unit of volatility. If you would invest  1,485  in Riskproreg 30 Fund on October 8, 2024 and sell it today you would lose (85.00) from holding Riskproreg 30 Fund or give up 5.72% of portfolio value over 90 days.

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

Federated Max Cap Index  vs.  Riskproreg 30 Fund

Federated Max Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Max Cap Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Riskproreg; 30+

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riskproreg 30 Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Riskproreg; 30+ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Federated Max-cap and Riskproreg; 30+

The main advantage of trading using opposite Federated Max-cap and Riskproreg; 30+ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Max-cap position performs unexpectedly, Riskproreg; 30+ 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 Riskproreg; 30+ will offset losses from the drop in Riskproreg; 30+'s long position.

The idea behind Federated Max Cap Index and Riskproreg 30 Fund 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.