Correlation Between Federated Mdt and Harbor Mid

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

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

Diversification Opportunities for Federated Mdt and Harbor Mid

0.97

Correlation Coefficient

Federated Mdt  Harbor Mid

Almost no diversification

The 3 months correlation between Federated and Harbor is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mdt Large and Harbor Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Mid Cap and Federated Mdt 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 Mdt Large are associated (or correlated) with Harbor Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Mid Cap has no effect on the direction of Federated Mdt i.e., Federated Mdt and Harbor Mid go up and down completely randomly.

Pair Corralation between Federated Mdt and Harbor Mid

Assuming the 90 days horizon Federated Mdt Large is expected to generate 1.15 times more return on investment than Harbor Mid. However, Federated Mdt is 1.15 times more volatile than Harbor Mid Cap. It trades about -0.02 of its potential returns per unit of risk. Harbor Mid Cap is currently generating about -0.05 per unit of risk. If you would invest  3,504  in Federated Mdt Large on September 26, 2024 and sell it today you would lose (32.00) from holding Federated Mdt Large or give up 0.91% of portfolio value over 90 days.

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

Federated Mdt Large  vs.  Harbor Mid Cap

Federated Mdt Large

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mdt Large are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Federated Mdt is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harbor Mid Cap

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor Mid Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Harbor Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Federated Mdt and Harbor Mid

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

The idea behind Federated Mdt Large and Harbor Mid 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.