Correlation Between Federated Mdt and Guggenheim Styleplus

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

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

Diversification Opportunities for Federated Mdt and Guggenheim Styleplus

0.67

Correlation Coefficient

Federated Mdt  Guggenheim Styleplus

Poor diversification

The 3 months correlation between Federated and Guggenheim is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Guggenheim Styleplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Styleplus and Federated Mdt 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 Mdt Large are associated (or correlated) with Guggenheim Styleplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Styleplus has no effect on the direction of Federated Mdt i.e., Federated Mdt and Guggenheim Styleplus go up and down completely randomly.

Pair Corralation between Federated Mdt and Guggenheim Styleplus

Assuming the 90 days horizon Federated Mdt Large is expected to generate 0.67 times more return on investment than Guggenheim Styleplus. However, Federated Mdt Large is 1.49 times less risky than Guggenheim Styleplus. It trades about -0.28 of its potential returns per unit of risk. Guggenheim Styleplus is currently generating about -0.26 per unit of risk. If you would invest  3,677  in Federated Mdt Large on October 9, 2024 and sell it today you would lose (571.00) from holding Federated Mdt Large or give up 15.53% of portfolio value over 90 days.

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

Federated Mdt Large  vs.  Guggenheim Styleplus

Federated Mdt Large

Risk-Adjusted Performance

0 of 100

Very Weak

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

Guggenheim Styleplus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Styleplus has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Federated Mdt and Guggenheim Styleplus

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

The idea behind Federated Mdt Large and Guggenheim Styleplus 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.