Correlation Between Fisher Investments and Federated Strategic

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

By analyzing existing cross correlation between Fisher Small Cap and Federated Strategic Income, you can compare the effects of market volatilities on Fisher Investments and Federated Strategic 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 Fisher Investments with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Investments and Federated Strategic.

Diversification Opportunities for Fisher Investments and Federated Strategic

0.75

Correlation Coefficient

Fisher Investments  Federated Strategic

Poor diversification

The 3 months correlation between Fisher and Federated is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Small Cap and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic and Fisher Investments 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 Fisher Small Cap are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Fisher Investments i.e., Fisher Investments and Federated Strategic go up and down completely randomly.

Pair Corralation between Fisher Investments and Federated Strategic

Assuming the 90 days horizon Fisher Small Cap is expected to generate 3.21 times more return on investment than Federated Strategic. However, Fisher Investments is 3.21 times more volatile than Federated Strategic Income. It trades about 0.2 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.09 per unit of risk. If you would invest  1,246  in Fisher Small Cap on October 23, 2024 and sell it today you would earn a total of  43.00  from holding Fisher Small Cap or generate 3.45% return on investment over 90 days.

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

Fisher Small Cap  vs.  Federated Strategic Income

Fisher Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Fisher Investments may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Federated Strategic

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Strategic Income are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Federated Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Fisher Investments and Federated Strategic

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

The idea behind Fisher Small Cap and Federated Strategic Income 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.