Correlation Between Federated Global and Federated Global

Can any of the company-specific risk be diversified away by investing in both Federated Global 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 Global 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 Global Allocation and Federated Global Total, you can compare the effects of market volatilities on Federated Global 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 Global with a short position of Federated Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Federated Global.

Diversification Opportunities for Federated Global and Federated Global

-0.24

Correlation Coefficient

Federated Global  Federated Global

Very good diversification

The 3 months correlation between Federated and Federated is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Federated Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Global Total 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 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 Total has no effect on the direction of Federated Global i.e., Federated Global and Federated Global go up and down completely randomly.

Pair Corralation between Federated Global and Federated Global

Assuming the 90 days horizon Federated Global Allocation is expected to generate 1.43 times more return on investment than Federated Global. However, Federated Global is 1.43 times more volatile than Federated Global Total. It trades about 0.11 of its potential returns per unit of risk. Federated Global Total is currently generating about 0.07 per unit of risk. If you would invest  1,958  in Federated Global Allocation on September 1, 2024 and sell it today you would earn a total of  145.00  from holding Federated Global Allocation or generate 7.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

Federated Global Allocation  vs.  Federated Global Total

Federated Global All

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Global Allocation are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Federated Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated Global Total

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Federated Global and Federated Global

The main advantage of trading using opposite Federated Global and Federated Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global 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.

The idea behind Federated Global Allocation and Federated Global Total 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.