Correlation Between Federated Global and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Federated Global 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 Federated Global and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Federated Strategic Value, you can compare the effects of market volatilities on Federated Global 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 Federated Global with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Federated Strategic.
Diversification Opportunities for Federated Global and Federated Strategic
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Federated is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value and Federated Global 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 Global Allocation 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 Value has no effect on the direction of Federated Global i.e., Federated Global and Federated Strategic go up and down completely randomly.
Pair Corralation between Federated Global and Federated Strategic
Assuming the 90 days horizon Federated Global is expected to generate 1.72 times less return on investment than Federated Strategic. But when comparing it to its historical volatility, Federated Global Allocation is 1.19 times less risky than Federated Strategic. It trades about 0.06 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 549.00 in Federated Strategic Value on September 25, 2024 and sell it today you would earn a total of 42.00 from holding Federated Strategic Value or generate 7.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Federated Global Allocation vs. Federated Strategic Value
Performance |
Timeline |
Federated Global All |
Federated Strategic Value |
Federated Global and Federated Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Federated Global and Federated Strategic
The main advantage of trading using opposite Federated Global and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global 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.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 |
Federated Strategic vs. Federated Emerging Market | Federated Strategic vs. Federated Mdt All | Federated Strategic vs. Federated Mdt Balanced | Federated Strategic vs. Federated Global Allocation |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |