Correlation Between Federated Prudent and Qs Large

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

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

Diversification Opportunities for Federated Prudent and Qs Large

-0.98

Correlation Coefficient

Federated Prudent  Qs Large

Pay attention - limited upside

The 3 months correlation between Federated and LMUSX is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding Federated Prudent Bear and Qs Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Large Cap and Federated Prudent 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 Prudent Bear are associated (or correlated) with Qs Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Large Cap has no effect on the direction of Federated Prudent i.e., Federated Prudent and Qs Large go up and down completely randomly.

Pair Corralation between Federated Prudent and Qs Large

Assuming the 90 days horizon Federated Prudent Bear is expected to under-perform the Qs Large. But the mutual fund apears to be less risky and, when comparing its historical volatility, Federated Prudent Bear is 1.11 times less risky than Qs Large. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Qs Large Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,355  in Qs Large Cap on September 17, 2024 and sell it today you would earn a total of  255.00  from holding Qs Large Cap or generate 10.83% return on investment over 90 days.

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

Federated Prudent Bear  vs.  Qs Large Cap

Federated Prudent Bear

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Prudent Bear has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Federated Prudent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Qs Large Cap

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qs Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Qs Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Federated Prudent and Qs Large

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

The idea behind Federated Prudent Bear and Qs Large Cap 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.