Correlation Between Federated Max and Federated Global
Can any of the company-specific risk be diversified away by investing in both Federated Max and Federated Global 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 and Federated Global 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 Federated Global Allocation, you can compare the effects of market volatilities on Federated Max and Federated Global 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 with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Max and Federated Global.
Diversification Opportunities for Federated Max and Federated Global
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Federated is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Federated Max Cap Index and Federated Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global All and Federated Max 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 Federated Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Global All has no effect on the direction of Federated Max i.e., Federated Max and Federated Global go up and down completely randomly.
Pair Corralation between Federated Max and Federated Global
Assuming the 90 days horizon Federated Max Cap Index is expected to under-perform the Federated Global. In addition to that, Federated Max is 4.98 times more volatile than Federated Global Allocation. It trades about -0.2 of its total potential returns per unit of risk. Federated Global Allocation is currently generating about -0.13 per unit of volatility. If you would invest 2,091 in Federated Global Allocation on September 24, 2024 and sell it today you would lose (32.00) from holding Federated Global Allocation or give up 1.53% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Federated Max Cap Index vs. Federated Global Allocation
Performance |
Timeline |
Federated Max Cap |
Federated Global All |
Federated Max and Federated Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Max and Federated Global
The main advantage of trading using opposite Federated Max and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Max position performs unexpectedly, Federated Global 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 Global will offset losses from the drop in Federated Global's long position.Federated Max vs. Federated Emerging Market | Federated Max vs. Federated Mdt All | Federated Max vs. Federated Mdt Balanced | Federated Max vs. Federated Global Allocation |
Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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