Correlation Between Northern Large and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Northern Large 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 Northern Large and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Large Cap and Federated Strategic Value, you can compare the effects of market volatilities on Northern Large 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 Northern Large with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Large and Federated Strategic.
Diversification Opportunities for Northern Large and Federated Strategic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northern and Federated is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Northern Large Cap 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 Northern 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 Northern Large Cap 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 Northern Large i.e., Northern Large and Federated Strategic go up and down completely randomly.
Pair Corralation between Northern Large and Federated Strategic
Assuming the 90 days horizon Northern Large Cap is expected to under-perform the Federated Strategic. But the mutual fund apears to be less risky and, when comparing its historical volatility, Northern Large Cap is 1.13 times less risky than Federated Strategic. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Federated Strategic Value is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 552.00 in Federated Strategic Value on January 25, 2024 and sell it today you would earn a total of 2.00 from holding Federated Strategic Value or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Large Cap vs. Federated Strategic Value
Performance |
| Timeline |
| Northern Large Cap |
| Federated Strategic Value |
Northern Large and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Large and Federated Strategic
The main advantage of trading using opposite Northern Large and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Large 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.| Northern Large vs. Edgewood Growth Fund | Northern Large vs. Hartford Schroders Emerging | Northern Large vs. HUMANA INC | Northern Large vs. Aquagold International |
| Federated Strategic vs. Edgewood Growth Fund | Federated Strategic vs. Hartford Schroders Emerging | Federated Strategic vs. HUMANA INC | Federated Strategic vs. Aquagold International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |