Correlation Between Federated Ultrashort and Ocm Mutual

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

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

Diversification Opportunities for Federated Ultrashort and Ocm Mutual

0.86

Correlation Coefficient

Federated Ultrashort  Ocm Mutual

Very poor diversification

The 3 months correlation between Federated and Ocm is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ultrashort Bond and Ocm Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocm Mutual Fund and Federated Ultrashort 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 Ultrashort Bond are associated (or correlated) with Ocm Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocm Mutual Fund has no effect on the direction of Federated Ultrashort i.e., Federated Ultrashort and Ocm Mutual go up and down completely randomly.

Pair Corralation between Federated Ultrashort and Ocm Mutual

Assuming the 90 days horizon Federated Ultrashort is expected to generate 19.28 times less return on investment than Ocm Mutual. But when comparing it to its historical volatility, Federated Ultrashort Bond is 13.72 times less risky than Ocm Mutual. It trades about 0.23 of its potential returns per unit of risk. Ocm Mutual Fund is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,186  in Ocm Mutual Fund on December 19, 2024 and sell it today you would earn a total of  392.00  from holding Ocm Mutual Fund or generate 33.05% return on investment over 90 days.

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

Federated Ultrashort Bond  vs.  Ocm Mutual Fund

Federated Ultrashort Bond

Risk-Adjusted Performance

Solid

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

Ocm Mutual Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ocm Mutual Fund are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Ocm Mutual showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federated Ultrashort and Ocm Mutual

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

The idea behind Federated Ultrashort Bond and Ocm Mutual 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.