Correlation Between Simt Large and Federated High
Can any of the company-specific risk be diversified away by investing in both Simt Large and Federated High 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 Simt Large and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simt Large Cap and Federated High Yield, you can compare the effects of market volatilities on Simt Large and Federated High 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 Simt Large with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Large and Federated High.
Diversification Opportunities for Simt Large and Federated High
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Simt and Federated is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Simt Large Cap and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and Simt Large 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 Simt Large Cap are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Simt Large i.e., Simt Large and Federated High go up and down completely randomly.
Pair Corralation between Simt Large and Federated High
Assuming the 90 days horizon Simt Large Cap is expected to under-perform the Federated High. In addition to that, Simt Large is 4.91 times more volatile than Federated High Yield. It trades about -0.07 of its total potential returns per unit of risk. Federated High Yield is currently generating about 0.14 per unit of volatility. If you would invest 627.00 in Federated High Yield on October 24, 2024 and sell it today you would earn a total of 13.00 from holding Federated High Yield or generate 2.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Simt Large Cap vs. Federated High Yield
Performance |
Timeline |
Simt Large Cap |
Federated High Yield |
Simt Large and Federated High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Simt Large and Federated High
The main advantage of trading using opposite Simt Large and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simt Large position performs unexpectedly, Federated High 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 High will offset losses from the drop in Federated High's long position.Simt Large vs. Blrc Sgy Mnp | Simt Large vs. Dws Government Money | Simt Large vs. Franklin Government Money | Simt Large vs. Morningstar Defensive Bond |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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