Correlation Between Catalystaspect Enhanced and Federated Government

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

By analyzing existing cross correlation between Catalystaspect Enhanced Multi Asset and Federated Government Income, you can compare the effects of market volatilities on Catalystaspect Enhanced and Federated Government 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 Catalystaspect Enhanced with a short position of Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalystaspect Enhanced and Federated Government.

Diversification Opportunities for Catalystaspect Enhanced and Federated Government

0.81

Correlation Coefficient

Catalystaspect Enhanced  Federated Government

Very poor diversification

The 3 months correlation between Catalystaspect and FEDERATED is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Catalystaspect Enhanced Multi and Federated Government Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government and Catalystaspect Enhanced 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 Catalystaspect Enhanced Multi Asset are associated (or correlated) with Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Catalystaspect Enhanced i.e., Catalystaspect Enhanced and Federated Government go up and down completely randomly.

Pair Corralation between Catalystaspect Enhanced and Federated Government

Assuming the 90 days horizon Catalystaspect Enhanced Multi Asset is expected to generate 2.25 times more return on investment than Federated Government. However, Catalystaspect Enhanced is 2.25 times more volatile than Federated Government Income. It trades about 0.19 of its potential returns per unit of risk. Federated Government Income is currently generating about 0.16 per unit of risk. If you would invest  868.00  in Catalystaspect Enhanced Multi Asset on May 27, 2025 and sell it today you would earn a total of  78.00  from holding Catalystaspect Enhanced Multi Asset or generate 8.99% return on investment over 90 days.

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

Catalystaspect Enhanced Multi   vs.  Federated Government Income

Catalystaspect Enhanced

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystaspect Enhanced Multi Asset are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Catalystaspect Enhanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Federated Government

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Government Income are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Federated Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalystaspect Enhanced and Federated Government

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

The idea behind Catalystaspect Enhanced Multi Asset and Federated Government Income 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.